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it sounds like it could handle most of today's games (although steer far clear of any running the latest Unreal engine - such as Unreal 2, Postal 2, etc. - they stutters and load times would cause you to pull out your hair).
I'd boost the video power, if your budget allows. And keep in mind that if you're looking forward to Half-Life 2, Deus Ex 2 or Doom 3, you're not going to get optimal performance from that machine.
What games are on your wish list? That might help answer the question.
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"If you're walking on thin ice, you may as well go ahead and dance."
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