Tackled almost the same problem with the same snags last Spring.
1. Acknowledged that I cannot build anywhere near as cheaply as I can buy readymade.
2. Bought a mid-range Novatech. Dramatic increase in performance but noisy.
3. Bought a Thermaltake PSU, noise reduction almost perfect.
4. Added a floppy drive, because I still use it very occasionally and don't have room for two PCs.
OK it didn't cost a lot and I have Core 2 duo, 2Gb RAM SATA and all those things that have come onto the scene since I last built my computer.