Reading this has been entertaining. It's great that you are getting a hands on crash course on building a computer. SMH on converting serial port to vga...
I know you are shooting for price, but I generally stay away from AMD due to heat issues.
As for upgrading to Win8.1, yes, do it. Though things change from 8, they are good changes. Read this:
http://blogs.technet.com/b/askpfeplat/archive/2013/10/17/exploring-windows-8-1-start-screen-and-start-button-options-and-configurations.aspxSo, make sure you have a good external drive for backups. I recommend the Seagate Expansion. USB 3.0 and the 4TB is $150 on Amazon. I also recommend RAID 1 for your data drive, but you'll have to get an identical in size hard drive, and then you'll have to save all the data somewhere while the array builds as it will wipe the info. Finally, I recommend Norton or Kaspersky Anti-Virus. Make sure you turn on Boot scanning, which fights off Rootkits. I've seen 100 computers in the last 6 months in my shop and any AV program you name I've seen except those two. Granted, my town is not a great slice of the Internet, but it is a bit of info. Norton 2013 is $15, 2014 is $20 on Amazon (get 2013 cause it upgrades to 2014 after install).
Backups are best in triplicate, so use a cloud backup for the important stuff.