OK, on topic, eh?
That's a tad light on for a modern gaming rig. Matter of fact, looking at the display card chosen it's a LOT light on!
AMD Athlon64 is currently the best choice for gaming, not Intel. It'll do just as well as the Pentium for Photoshopping as well. Socket 754 is good enough and keeps costs down. Look for a decent and affordable Socket 754 NForce3 250 chipset motherboard, and an Athlon64 3200+ if you can fit it in the budget. Match it with at least 512Mb of PC3200 RAM, and 1Gb is better. Being cooler running than the latest Pentiums, it won't need either water cooling or a 120mm case fan
Display card is the most important factor for games and you shouldn't accept anything less than a Radeon 9600XT or an NVidia FX5900XT bare minimum! A Radeon 9800 Pro is still a decent card and is an affordable option also.
The Athlon64 for socket 754 probably won't go much past 3200+, but the addition of a better display card later on would keep that rig gaming for a long time to come anyway, so it wouldn't matter.
If funds are too tight, you could drop that back to an Athlon64 2800+ and have room for a processor upgrade later as well (although I wouldn't bother personally) and it'd still belt the piss outta that Pentium 2.6GHz