I, too, built a PC around the same budget a few months ago, and as Sandy Bridge was right in the middle of being recalled, I went with the processor you're considering (it also helped that it was cheaper because I was on a tight budget). I've had no complaints, and I've been able to run everything on the highest settings without an issue. I've actually slightly undervolted it to keep temps down, and things still run smoothly (and cool).
Also, I really haven't been impressed by the NZXT cases, fwiw. I would recommend the Antec 300. There just isn't a better case out there at that price point.