#1.
Go for a 9500GT and a P5Q motherboard if possible. The P5Q series are pretty OC-friendly. How much more (or less?) do you have to pay to switch the 9500GT for a Radeon HD 4850 or 4870?
Also, in practice, a 420W power supply will most likely not provide your components with as much as 420W of power. Your choice will most likely be sufficient, but upgrading to a 500W one still seems feasible. Corsair is a pretty good PSU brand.
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Okay I played around with my #1 computer, the price jumped significantly so I'll probably still change some things up, but here's what it's got:
Case - Nzxt Alpha Gaming Tower Case w/420W Power Supply
Case Lighting - Neon Blue
500 Watt -- Power Supply
Processor - Intel Core 2 Duo Processor E8500 (2x 3.16GHz/6MB L2 Cache/1333FSB)
Processor Cooling - AVC Silent Intel CPU Fan and Heatsink
Motherboard - [CrossFire] Asus P5Q Pro Intel P45 Chipset w/7.1 Sound, Gb LAN, S-ATA Raid, USB 2.0, IEEE-1394, Dual PCI-E MB
RAM - 4 GB [2 GB X2] DDR2-800 PC6400 Memory Module
Video Card - ATI Radeon HD 4850 512MB PCI-Express x16
Hard Drive - 500 GB HARD DRIVE [Serial-ATA-II, 3Gb, 7200 RPM, 16M Cache]
CD-RW/DVD-RW Drive - LG 20X Dual Format/Double Layer DVD±R/±RW + CD-R/RW Drive
Sound Card - 3D Premium Surround Sound Onboard
NIC - Onboard LAN Network (Gb or 10/100)
Flash Media Reader/Writer - 12-In-1 Internal Flash Media Card Reader/Writer
Price: $793.00