I just bought a used sn85G4 off Ebay and I really like it.
I think you have made a good decision on make and model.
I choose the sn85G4 due to price constraints. I would have rathered to get a mobo/barebones systm with the 939 slot(?). 939 provides a better upgrade path.
My pc is:
Shuttle XPC SN85G4 (Ebay)
AMD Athlon 64 3400 Clawhammer OEM (wherever the best price was on pricewatch.com)
1 GB Geil Ram (NewEgg.com)
250 gb WD Caviar SATA (Newegg)
Nec 3550 DVD burner (Newegg)
MSI 6600gt (Ebay)
LCD - I haven't purchased yet. Looking at the Viewsonic VA1912wb (NewEgg)
The only thing I am not really happy about is the vid card fan is on the loud side. Normally this wouldn't be a concern, but I wanted this pc for my bedroom and wanted to run 24/7.
I used pricewatch to price most of the parts. I normally buy at zipzoomfly, but newegg had most of their prices beat.
As far as the distro use what you are comfortable with. I like the Ubuntu 64. I like apt-get.
I am running Fedora Core 4 64 on my workstation, and I like it also.
I am not a huge fan of YAST so I have stayed away from SUSE.
I have only run Ubuntu 64 Live Cd on my new system just to make sure everything I bought is working right.
Video cards depend on what you are doing with it. Buy Nvidia (it will make your life easier.)
I choose the MSI 6600gt on price, and the fact it will play most new games well.( I only care about UT2004 cuz I am a addict.) I am running an evga 6800 on my workstation and like it also.
I hope this helps.