It is all compatible, but I do suggest going with a motherboard based off the AMD 900 series chipset to keep future upgrade options open. You will also need a graphics card. Due to the low budget, you have two options, go with a AMD 970 motherboard or go for an AMD APU-based system with graphics already on the CPU itself. An APU system is a little more expensive, but you don't have to buy a graphics card.
Motherboard: ASRock A55 PRO3 FM1 AMD A55
- This is also a bit more advanced, but you can only use AMD APU's so your upgrade options are much less. $74
APU: AMD A6-3650 Llano 2.6GHz Socket FM1
- This isn't AMD's highest end APU, it's an A6 not A8, but it is still capable. If this is too expensive, and you aren't making a gaming PC or needing much performance, the AMD A4-3400 Llano 2.7GHz Socket FM1
is a good alternative. $119
OS: Windows 7 Home Premium 64-bit OEM
- You forgot to add this. $99