Eh, I would wait. The CPU (Sandy Bridge) in that rig is about to become twice replaced as Haswell launches this summer.
It doesn't mean that it is bad/slow, but that it is already obsolete/replaced and will become unusable quicker than current tech.
Let us know when you are ready to pull the trigger, and we can work to find you the best deal, whether it is pre-packaged or DIY.
I've built rigs before at the $700 pricepoint, and they usually include an i3, 500GB-1TB HDD, 8GB ram, and a Radeon 7770/7750.
What you end up getting depends on when you buy it.
Ram is getting expensive, so if you find a good deal on 8GB ram (2x 4GB DDR3 1600mhz @ 1.5v dimms), grab them now.
Like Octavean said, the problem with buying gradually is that you might have a dead part and never know it until months later when you put everything together (and the RMA timeperiod has passed), so try to find a way to test everything you buy (in a friend's computer or some other compatible rig) if you aren't buying all at once.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.