You should really try E-bay. My Newegg setup for a media director cost about $250, but I was able to bring it down to $100 (except ram for some reason.. 512 MB) on E-bay. Of course I've now taken a different approach to the MD..
I know you're trying to build a hybrid, but hey I've I can take away $150 from my cost, you can probably take off $100..
Your setup looks fine but the only thing I would upgrade would be the Hard Drive.. but it really depends if you're going to record a lot of shows, have a lot of music, rip DVDs, etc...
Any Geforce 6, 7, 8 card should support Alpha Blending. Some cards may have driver problems, but you can get that fixed in no time =).