I didn't read all this thread but building your own PC is definitely the way to go!
If I were you I'd go with an i5 processor, those things have power to boot and are a lot better value (imo) than the i7's. I wouldn't bother with anything less than an i5 these days (I still run a Core 2 Quad 2.4ghz and it's fine, but you'd be silly to build something that's already obsolete). Since the new Sandy Bridge cpu's just came out there will probably be a price drop soon, too. The i5 760 would be my choice, it's currently just over $200AUD.
If you went with the i5 you'd need a socket 1156 motherboard, you'll get something decent for a little over $100.
I'd go with 4gig of RAM, if I were doing a build right now I'd use G. Skill Ripjaws, they're around $80 for two 2gig sticks, which also gives you room to go to 8gig down the line.
Don't skimp on your power supply, I like Corsair, Antec and OCZ myself and you couldn't go wrong if you spent about $150 on one.
You'll need a video card too, take your pick here really.. if you're just doing audio stuff you'd probably get away with spending only $40. Second hand is an option here too as you hardly need to push dx11.
Will you be running an external sound card? My guitarist has an Alesis Firewire thing at his house that does the job really well, but if you don't need one then a Creative X-Fi is what I use (around $100), though it may not be the best choice for audio editing, but I'll let you look into that (it does have an Audio Creation mode though that I've found good to use while editing, mostly just to turn all the cards little features off, though).
What sort of storage are you looking for? You'll want a lot if you'll be storing lots of audio files, I use Western Digital Green drives for that and you'd get 2TB for $100. If you can afford to, keep Windows and all your programs on a separate drive. I use a WD Black but I'd seriously consider a small solid state drive if I were you, it'll make your PC zippy as hell.
As for the case.. that's personal preference. Get something with room for your components to breath, though. The Corsair 600T will house my next build and I'd highly recommend taking a look at that, though it may be a bit excessive for your needs.
Only other thing to consider are your peripherals! Take your pick here, though a Razer gaming mouse is actually super good for editing if you get one with programmable buttons as you can set the mouse's DPI levels on them. In layman's terms that basically means that you can drastically lower the mouse sensitivity in under a second, which is cool if you need to do some really specific clicking in your DAW. Also don't forget studio monitors as computer speakers aren't the best to mix on!
Hope that helped you out a bit and feel free to ask any questions!