|- CPU is OK.|
- motherboard is weak due to the G31/ICH7 combo. Would be much better if it was a G43, G45, P43 or P45 paired up with the ICH10.
- RAM should be underclocked to 333MHz frequency to match the CPU or the CPU should be overclocked to 400MHz frequency (1600MHz FSB) to match the RAM.
- HD4650 is a weak gaming card, but at least it is considered a gaming card. You could have done worse.
- the 460W PSU is garbage but you certainly don't need an 850W PSU. You just need something good. Do NOT base you choice on wattage alone. Wattage is NOT the important spec, amperage is...especially on the +12v rail. You could easily run that system on a decent quality 400-500W PSU. A PSU with a single high amperage +12v rail is generally better than a PSU with multiple +12v rails (12v1, 12v2, 12v3, etc). And look for an efficiency rating of 80% plus.
- water cooling is a waste of money.
Since you seem to know how to upgrade components, why didn't you just build yourself a decent system in the 1st place? rather than buying a pre-built system, then immediately ripping it apart & throwing a couple $100 more into it?
BTW, it looks like this person has the exact same problem as you! lol