After years of doing upgrades I built 2 computers myself about 6 months ago. It’s not hard.
The advantages far outweigh the time consumed, IMHO, especially considering that you can get Windows XP for cheap. If you buy prebuilt, expect a ~$150 premium for XP, do it yourself and pay ~$80 for the OEM version at New Egg.
For the record, Intel boxed retail processors come with a fan/heatsink. These will have the correct amount of perfectly good thermal paste already applied to the heatsink. An Intel brand fan sold by itself (without a CPU) will also have paste pre-applied.
The hardest parts for me were the cabling and seating the heatsink/CPU fan. Intel uses these incredibly sucky pop pins to hold the fan to the motherboard. Once they are on, they work, but I was convinced I was about to snap the board while seating it.
I’ve never had a failure of a newish part, but after a few years, sure. I’m sure DOAs and early failures happen, but I think they are rarer than the reviews at New Egg, etc. would have you believe. Judging from the grammar I think a lot of the people writing reviews are kids who don’t know how to follow directions.
As long as you want a computer that ‘just works’, avoid overclocking at all costs. It is a hobby, not a cost-effective way of improving performance. If you decide at some point down the road that you do want a faster computer, spend a couple of bucks on new parts.
My totally subjective and unsolicited recommendations for parts for your mid-level game and visual editing computer:
If you can, wait until the Intel i7 starts shipping later this month. That should drive down prices for other processors.
Get a good quality, but not huge, power supply. 80+ certified is good (why waste electricity?). 500 or so watts should be plenty for a single graphics card, 1-2 hard drive system. Modular is nice, because it cuts down on those blasted cables I hate so much.
Get 4 GB of RAM. Yes, 32 bit OS’s can’t address all of it, but the limit is somewhere north of 3 GB. The cost savings between 2 and 4 GB are fairly small.
Don’t buy fancy RAM. DDR2-800 is dirt cheap and within a few percent of the speed of the expensive stuff. When running real applications (as opposed to benchmarks) the difference is even smaller.
Don’t buy fancy cooling. The stock Intel fan/heatsink is perfectly good, quiet, and cheap.
Don’t bother with a RAID, unless you are dealing with really sensitive data. An external backup hard disk (or 2) kept in a firesafe is much less of a hassle.
Onboard audio is probably sufficient.
Dual video cards are likely overkill.