With the case open my sys temp is about 37 degrees celcius..with the case on it goes to 40/41. This seems high to me for sys temp..my cpu temp is 42 idle...normal for a AMD 2000+. I have i case fan in the back of the comp blowing hot air out..all my cables are out of the way and neat...whats causeing the high sys temp

Sounds like a bum reading to me, considering your reported cpu temp is only 3-4C warmer. Or possibly the motherboard probe that measures the board temp is next to a really hot device, thus giving a false reading. Your cpu temp is fine, hopefully that one is correct also. Just to be sure, get your temperatures from the bios, rather than windows software. Have you tried placing a household fan next to your computer? In addition, what is the air temperature in your room?

I have a XP2400 with a QTECH 550watt Dual Fan PSU and a 92mm exhaust fan with my latest bios its 50 degrees idle with a Coolermaster X-Dream running at 3500rpm with a room temp of about 24 degrees and the system temp is 40 degrees, but im running a 1.8v version of the xp2400 and this is the version that doesnt overclock sadly enough, soon to get new parts hopefully though, a Radeon 9600 Pro and a XP2800 :D

It is posible that the sensor is up the upper part of the board near the powersupply where there is a considerable amount more heat. The reading from the bios and software monitor are identical. I havnt tried using a fan. And with regards to the temp of the room, I am a poor student and i live in Canada...so that means that the temperature here is somewhat refreshing.