For word processing,digital photos, htpc...
"The computer will be used for email and some word processing, digital photos, and also be used as a HTPC computer."
i would recommend an athlon x2 4850e, it should be less than $100, and has very low power consumption (around 45W TDP if i'm not mistaken). you wont need a powerful,noisy cooler..which is excellent for htpc. also, its powerful enough to handle most loads, and if you ever need more power, you can easily overclock it, unlike the phenoms and the more powerful x2 6000+ and above.
i believe there are a couple of reviews out there pairing the 4850e with a geforce 8200 chipset motherboard (which the an78gs is using), you might wanna check those out.