Recommend a CPU

Hi guys, I am trying to build a pc for light to moderate use. Mostly internet and office applications. Here is my build:
GIGABYTE GA-G33M-S2H LGA 775 Intel G33 HDMI Micro ATX Intel Motherboard
G.SKILL 1GB 240-Pin DDR2 SDRAM DDR2 800
Western Digital Caviar RE WD1600YS 160GB 7200 RPM 16MB Cache SATA 3.0Gb/s
SAMSUNG Black CD-ROM 2MB Cache SATA DVD Burner With LightScribe Technology
Sunbeam PSU-BKS580-US ATX 580W Power Supply.

Can you guys recommend me a good CPU for less than ~$125. My roommate recommends that I get the Intel Dual-Core E2160 Allendale 1.8GHz. http://www.newegg.com/product/product.asp?item=N82E16819116036

The E2160 sounds like a good idea, should do what you need easily. If you want a little bit more power for 130 you can get an E4500 or E4400 which have an extra MB of L2 cache, and probably more overclocking room.

How about this instead:

Mobo: http://www.newegg.com/Product/Product.aspx?Item=N82E16813128052
CPU: http://www.newegg.com/Product/Product.aspx?Item=N82E16819103778 / http://www.newegg.com/Product/Product.aspx?Item=N82E16819103776
RAM: http://www.newegg.com/Product/Product.aspx?Item=N82E16820231098

Better performance at stock speed for around the same price.

agree with alg7.
and you definitely want 2gig of ram. dont stop at 1.

CPU: http://www.newegg.com/Product/Product.aspx?Item=N82E16819115031 $129.99
Ram: http://www.newegg.com/product/product.asp?item=N82E16820231087 $69.99

If you want the E4500, its pretty cheap from these places:
$100 - Core 2 Duo E4500 Allendale 2.20GHz 800Mhz 2MB L2
$122 - Intel Core 2 Duo E4500 Allendale 2.2GHz 800Mhz 2MB L2

Though, if you're on a tight budget and dont plan on OC'ing, the AMD route would be better.