Celeron 430 in an HTPC

I would recommend staying away from a system based on ancient hardware.  Given the budget I can understand the motivation, but you don't need to shoot so low to achieve that.  Based on the requirements I've put together two sample systems - please note that this is very "back of the envelop" I put no effort into vetting the quality of the individual components (that said, mobo selection is probably the only thing I'd really worry about in the list).

SNB:

Llano:

Unless you are doing more than light gaming there's no need for a dGPU.  Also, the nice thing about going IPG w/ a decent CPU first is that in a year or two if there's a need for more GPU you can throw a discrete card in for $30-60.

I think the Pentium G620-based system Andrew suggested fits your requirements very well. I definitely agree that you should not build the system you originally posted. The SNB Pentium system has a lot of legs and will serve you well for a long time. If your needs grow down the line, you can throw in some very powerful processors, discrete GPUs, additional storage, etc. On its own, the G620 is more than capable of playing back virtually everything there is today in video and handling basic record/playback HTPC duties.

I like NVIDIA GPUs, it is just their nForce network card that is unreliable when taxed.  We have a review unit Zotac ZBOX ZBOXHD-ND22-U that I'm extremely delayed in publishing a review for.  It works very well...except for 1- the network card. 2- no HD Audio bistreaming support.

I put network cards very high, higher than most, on my feature list when looking at motherboards and OEM builds so maybe take what I'm saying with a grain of salt.

Unless you are strapped for space, the suggested Sandy Bridge platform is a much better idea. It will still run cool and be very power-efficient.

I hope early next week.  I'll address a few points here tomorrow though.

I built a system very much like that in the OP a couple of years ago.  I used a Zotac GF9300-D-E mini-ITX motherboard and a Celeron 450 Conroe-L CPU.

It worked pretty well for most HTPC tasks.  I don't recall how well Netflix streaming did on it, but I know I had issues with Blu-Ray playback stuttering on several disks which disappointed me enough that the system saw little use.  Maybe the problem was the OEM version of Power DVD 8, but I expected decent hardware acceleration with the 9300 GPU.

If I had to do it again today, I would definitely go with something newer.  The Sandy Bridge system that was recommended will produce a much better experience for not much more money than the Celeron system.