I built my current set-up for less than $500
C2D E6850--$129.99
Abit IP35 Pro--$89.99
Geforce 9600GT--$139.99
Crucial Ballistix PC2 8500 2X1gig--$29.99 after rebate
I already had a case, PSU, fans, drives, etc.
Not sure how much you'll be able to utilize your old stuff in a new build.
You don't really need the best of everything. That IP35 Pro board is probably one of the best boards you can get for your money. The E6850 isn't too shabby either. Abit has lacked for a few years, but they're back up there again in terms of quality and support. I had an old P4 3.2ghz with 2gigs of ram and a Geforce 6800UltraExtreme that held me over for quite some time. It was perfect for AH, but lacked graphically in most other newer games I play (Crysis, COD4, Oblivion, Etc). I like to follow prices of new and old stuff just for fun. Now with the Geforce GTX280, I'm sure prices will fall pretty soon if they haven't already. Ram is supposed to fall in price as well. It's all up to you and how much you want to spend. If your older stuff isn't THAT old, you can try and part it out. You'd make more money that way. I was considering keeping my old system as a back-up, but found that the stuff I had in it could pretty much buy me a new system. Anyway, good luck!
I was absolutely floored when I could run AH with full AA without any hiccups. It just looks altogether better and is much easier to immerse myself in (sort of like a bath in warm sour cream).