If you want to go under budget try and find someone with a business and get them to order it, VAT is around £75 on that. You will not see the cash for a little while (3 months is the tax period as I recall) but yeah.
PC building is square peg in square peg hole sort of thing and it comes with manuals to do it (if you do not read said manual you are asking for trouble). The most important part I find is to get the drivers (bundled stuff is usually old and bug ridden), OS and stuff to install all sorted beforehand (there are a few threads recently linking peoples choice apps up one here:
http://gbatemp.net/index.php?showtopic=54757&hl= ).
The only real things to make sure of are:
USB and firewire often have the same connectors (different colours or names by them though) on the motherboard: do not confuse them. Likewise the power button to the board may also be slightly confusing.
Graphics cards and motherboards tend to have two power inputs: unless the manual says otherwise (and I know of none that do) power all of them.
Loose connections are a pain, avoid them.
CPU + heatsink. The core2 line come with decent coolers but adding them can be a pain: there are several stripes of conductive paste already applied and the force of attaching the fan is supposed to spread it out. Make sure to be careful when applying this unless you want to go and buy some more (which is fairly expensive).
PSU: akasa do great PSUs (I have used them in a few builds recently and that one should work fine.
Case: I would happily give you a case (presently we are in the same town it would seem) but I am not sure I have a spare ATX one around. You can probably bring yourself into budget with a trip into town but most of those deals are junk case+PSU bundles.
All other components should work fine together.
I assume also you have a CD/DVD drive, keyboard mouse etc already.
Edit:
Missed the speakers etc.
This sort of stuff ideally gets factored in but most (myself included) leave it out of for friends/family members to get for "tech gifts". Not to mention each adds a
Mouse: laser, USB and wired is my choice. Gamers mice are not bad but are often horrendously overpriced.
Keyboard: I am suffering a £5 keyboard presently, no model numbers or anything I can suggest.
Speakers: good speakers are more than you will spend on this machine and also make a good upgrade, stick with some standard stereo stuff or even use the ones from your stereo (search for a 3.5 mm jack to RCA/phono).
http://www.cableuniverse.co.uk should do them and I know there are places in town that do them for less than £10.