You're looking at an AM3 system, so you cannot use DDR2 RAM. The PSU doesn't have to be quite as powerful and I suggest a different motherboard. You also should use 64-bit Vista. Here's some of the changes I would make.
Motherboard: ASRock M3A780GXH/128M AM3 AMD 780G HDMI ATX AMD Motherboard
- This is a great board for AM3 boards and it can Crossfire if you later choose to do so. $89
RAM: Crucial 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1066
- All AM3 motherboards require DDR3 memory. $60
Power Supply: Here is where you can keep what you have. If you later choose to use Crossfire or get an X2 card the 700W PSU you selected will work well. If you don't plan on using another graphics card, an OCZ ModXStream Pro OCZ600MXSP 600W
would be more cost effective.
Operating System: Microsoft Windows Vista Home Premium SP1 64-bit
- You need a 64-bit OS to use 4GB or more of RAM. This also comes with a free upgrade coupon to Windows 7. $109