IIRC the Radeon 7500 is a VERY VERY old card... I'm pretty sure it is not capable of offloading the load of playing video from the CPU. A low end DirectX10 capable GPU (or even integrated graphics) will help keep CPU loads low while watching movies. Also if you are running Vista, you will NOT get the Aero interface because of the old GPU. Look for an nVidia 8xxx or higher, or ATI 2xxx or higher chip; I can't recommend any Intel GMA because every time I see a computer with one, the IGP is the bottleneck :P
RAM
Since you are not overclocking, you can choose any RAM at that's DDR2 667 (PC2-5400) coming from a decent brand like Kingston or OCZ. I have no real brand preference so I just wait for sale prices

I say to use at least DDR2-667 because the Intel E8400 runs a 333Mhz bus which is the same as the clock speed that DDR2-667 runs at. I myself am using cheapo RAM (see my sig) and I know for sure that my CPU will bottleneck me long before the RAM does.
POWER SUPPLY
You didn't mention a high-end graphics card or anything truely power-hungry, the 520W is probably overkill. My friend runs a similar system in terms of power requirements off an Antec Earthwatts 370W power supply.
Good luck!