That list of components is pretty cringe-worthy. I understand your desire to keep it within the price range of a PS3/XBox, but with that setup things are either going to be outdated or simply break within 2 years, at which point you may spend another $600...kinda defeating the claim that costs are comparable.
I wouldn't include the monitor/speakers; consoles need to get HDTV's and receivers/speaker systems too, and both will last you through multiple systems/rigs to offset their costs.
Either do a Core 2 Duo or if you're really tight for money, an AMD X2. Get better RAM beyond "value" as well, more stable/reliable. And please stick with a decent HDD manufacturer like Hitachi or Seagate; economies of scale apply well to HDD's nowadays and it doesn't make much sense to get a 80GB one when you can get a 200+GB one for a little more.
Similarly, don't skimp on the case or the PSU - I wouldn't get anything less than 600W nowadays, and a good case will make upgrades so much easier and increase air flow in your system. I'd personally go for better a keyboard and mouse as well - anybody who plays FPS's will tell you a good mouse makes a huge difference and they last you a while anyway. Oh, and you have no optical drive, and I find it helpful to add a floppy + memory card reader, esp. if you're going to use SATA with Windows XP.
In the end, you're going to spend $1200+ on a decent rig, but you'd only have to upgrade $200 every year (or $300 every other year) to keep up with the times. PC's do give you more than consoles, so in my mind that justifies the added cost, and there's no real need to "match" consoles' price or functionality.
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