Don't skimp on monitor + mouse + keyboard. Those are the things you're going to interact with for hours every day. It's nice to be comfortable while you're doing it. I'd rather skimp on internals a little and get good externals than vice versa, personally.

For example why bother with a good video card if your monitor sucks? I got this monitor recently: Newegg.com - ASUS VG248QE Black 24" 144Hz 1ms (GTG) HDMI Widescreen LED Backlight LCD 3D Monitor Height&pivot adjustable 350 cd/m2 80,000,000:1 Built-in Speakers because it supports 1080p at 120hz with low input lag, and it's a good size for me when I'm sitting 2 feet in front of it.

Definitely you don't need water cooling and stuff like that. You need a good CPU and a good video card if you're playing games, that's about it. Make sure your power supply can handle everything you plug into it. Make sure your stuff physically fits in the case like Spuuky said. Make sure your motherboard is compatible with the CPU and video card you buy.

My PC has 12 GB RAM and I don't need that much. I don't have an SSD. I have a 5-year old 2.67GHz i7 CPU. I can still run most games on high enough settings to look better than my PS3.