[Paranoid Android]

2500k is not an overkill. It's probably the smartest choice because it runs fine normally and you can overclock it significantly (just upgrade the cooling unit) in the future when counterparts (non-overclocked counterpart) become obsolete. i7 extreme is overkill because it isn't good for anything as of now and it will be useless when Ivy-Bridge comes out in April.

i5 is definitely the way to go with a $1000 budget. I'd only go phenom II X4/X6 if I have a much tighter budget. It's pretty much the dead center of modern processor spectrum. In at most 2 years, it will become obsolete (for gaming).

I personally like p67 over z68.

I would say 22"~24" for LCD monitor. 27" Is nauseating x_X. But it depends on games you play I guess. (try playing gunz/S4 league, jebus!)

GTX560 for your budget. Anything higher might break your budget if you include the monitor.
Cut the SSD, it's not a necessity, you can always add one later on. 7200rpm, 500 GB. +1TB external if you keep a lot of multimedia.

1x6GB DDR3 RAM. 6 GB is bare minimum for a gamer with Win7/8. And expand next year to 2x6. 2x6 cheaper than 3x4.

If it wasn't for the monitor, this should cost $700-800. My i7 laptop with HD6570 was less than $1000 bought last august.