I have just finished working on a project where we cut in HD.
We cut using Avid editing software on a HPxw8200 system. Xeon 3.2ghz i think. Windows XP, 3 gigs of ram. THIS IS OLD!!!
Amazingly this little computer didn't struggle with the HD footage at all. (creating Quicktimes took all night however...)
We had an external 2Terabyte e-sata Lacie drive as our storage.
Anyway...if your going with Avid, they certify Nvidia graphics. That's not to say it won't work with an ATI card, but 300 bucks is a bit of a gamble.
I'm building a new computer:
I'm looking at the same CPU i7-930
Seriously thinking about Gigabyte GA-X56A-UD3 Motherboard.
GA-X58A-UD3R (rev. 1.0) - GIGABYTE - Product - Motherboard - Overview