Since you already have a video game, I assume you have the mouse, keyboard, and speakers. If this is the case, all you need is a tower. $700 will get you a decent PC.
Case:
Sunbeam Transformer IC-TR-US-BA-WOPSU Black Steel ATX Full Tower Computer Case - This is a full tower case making it easy to work in and it will handle the huge graphics cards. $74 (Before $25 mail-in rebate)
Motherboard:
GIGABYTE GA-MA770T-UD3P AM3 AMD 770 ATX AMD Motherboard - This is an entry level AM3 board from a respected brand. Since this isn't designed for high performance, it does not allow for Crossfire but it will allow for DDR3 memory and the new AMD processors. $79
Video Card:
XFX HD-489A-ZDFC Radeon HD 4890 1GB - This is ATI's best single GPU card. Unless you run some very high end games, this will do well. With a large graphics card such as this, you need a large full-ATX case. $199
Optical Drive:
LG GH22NP20 DVD Writer - This drive will read and write most optical media. Newegg had a bad selection of drives so this one comes from TigerDirect. $29
Power Supply:
OCZ StealthXStream OCZ600SXS 600W - OCZ makes good power supplies and this should meet your needs. $69 (Before $10 mail-in rebate)
CPU:
AMD Phenom II X3 720 2.8GHz Black Edition - This is AMD's best triple core processor. It has more power than a dual core, but less than a quad. Since it is Black Edition, the multiplier is unlocked making overclocking a breeze. $119
RAM:
mushkin HP 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1600 - Your motherboard requires DDR3 memory and this will do. $69
Hard Drive:
Western Digital Caviar Black WD6401AALS 640GB - This is plenty of space for many users. $69
Operating System:
Windows 7 Release Candidate 64-bit - You need a 64-bit operating system to use 4GB or more of RAM. Normally, I would suggest Windows Vista but since this is free it will work. This is a release candidate that will expire March 2010 so you have to purchase Windows 7 prior to then. Windows 7 will be released October 22nd, 2009.
Total Price: $713 (Before mail-in rebates)