thresxx

Mugen 3 is good, if a bit large. Just make sure you have enough room in your case, and proper RAM clearance. If you aren't really going to overclock you can save a few dollars and get the Coolermaster Hyper 212+ it's pretty awesome for the price.

If you are using the machine for gaming and not going to be using it for work, save a few bucks and get an i5-2500k. Hyperthreading is useless in games, so an i7 is overkill.

If you are looking to extend the life of that old P4, try the buy/sell/trade sections in computer enthusiast forums or EBAY, craigslist, etc. Yuo should be able to find used power supplies and older graphics cards for cheap. Lots of people have extra hardware that they get rid of this way. Do not spend any money on brand new stuff for an older computer like that. Only spend money if you can score a good deal.

If you want to really push that i5 with an overclock, you don't want a cheap cooler, LOL. I've heard good things about the Thermalright Venemous X paired with an i5-2500k.

Save a little money and buy a GTX 460 with a good cooler. They can overclock like beasts, and are basically a gtx 560 after an overclock. Or get a 6870 with a good cooler. They are two of the best bang for your buck cards right now, and both can be overclocked rather safely. As for the shaders, nVidia and AMD/ATI have very different graphics architechture, so you cannot compare them in terms of number of shaders. Basically go for whatever card has the best price, and a decent cooler.