Well you're making a saving by using old HDDS

(a 1TB HDD being the same price as your GPU)
And i was reffering to making a decent PC new with all major brand components.You CAN build cheaper, but personally i don't trust cheap brands (expecially for PSUs) and its no where near as Gucci.
Modern games do use more than 2 cores now btw. Especially those with PhysX.
......1tb HDD is £50
Modern Games engines arnt opitmised for multicore utilization. (how ever the next gen will be thanks to consoles) Its mearly the extra threads and single core performance that gives most the illision that more cores are helping (its a more a case of the extra cores help run teamspeak and arnt a drain with other background programs)
As for Physx, its a gpu thing. More bluntly, its a Nvidia only thing. So unless you have a Nvidia GPU you cant have PhysX atm to be able to use a nvidia gpu as a physx card with an AMD maincard you have to use an unofficial driver patch.
As for the components, The build consists of all brand new components brough from PC world overclockers and Ebuyer
MSI Motherboard
Corsair 430Modular PSU
Intel CPU
EVGA gtx550ti gpu.
PNY Ram.
Cooler master case.
The motherboard is only h61 chipset so not suitable for overclocking and is limited to 1333Mhz ram. but again, unless you are a creative professional, it isnt noticeable. Take time to really learn about computer technology and you will notice how basic and cheap it really is.
For gaming all you need is an I5 a 3570k is the mos CPU you will need for gaming purpose, for the next 3 years Id say. If some one says I7, unless you are rendering out video and doing 3d video, I7 is just going to be used to make bench tests look pretty and for braging rights. The extra hyper threading will be better, but only by about 3-5fps. not worth the extra £80 for.
Edit: Just throw together a Build quote for £500 using high performance components.
MSI Z77 Motherboard (top tier chipset for Intel 1155socket motherboard)
8 GB Corsair vengance ram
600w Corsair PSU
Cooler Master case
GT660 GPU
I5 3570k (could save £50 if you do not intend to overclock)
1TB HDD.
In all, PC gaming is as expensive as people think it is. It can be. But it doesnt have to be.