Well, I'm about to get a new PC (Finally). Here are the specs I'm aiming for.

AMD Athlon(TM) 64 X2 6000+ dual-core - 3.0GHz - or Phenom(TM) 9500 quad-core processor - 2.2GHz (need help choosing)

3GB DDR2-667MHz dual channel SDRAM (2x1024,2x512)

GeForce 8600GT, TV-out, DVI-I, HDMI

320GB 7200 rpm SATA 3Gb/s hard drive

LightScribe 16X max. DVD+/-R/RW drive

Sound Blaster X-Fi Xtreme Audio

Can't decide on the CPU. Any suggestions? and is everything else sufficient to make it a gaming rig.

I would go with the quad core, you will have much more power over the Dual Core. Everything else looks good.

you may want to upgrade your video card to an 8800gt over the 8600.

its only $100 more and with your setup, that doesnt seem to be out of the reach of your budget.

http://www.newegg.com/Product/Product.aspx?Item=N82E16814121221 newegg

http://www.tigerdirect.com/applications/SearchTools/item-details.asp?EdpNo=3509852&CatId=1560 tigerdirect

I agree with the quad core and 8800GT

The 8800GT is virtually as fast as the GTX but is seriously cheap by comparison, i've also read that the 8600 series is a bit disappointing

For quad-core, go with an Intel Q6600 Energy-Efficient edition with G0 stepping, excellent performance for the money and easily overclockable from stock to 2.4ghz to well over 3.0

Nice and I agree with the suggestions. ATI's 3850 and 3870 video card offerings are also very good suggestions.

What OS have you settled on?