There wasn't anything wrong with your component choices, especially since the i7-960 and X58 have the big advantage of being readily available everywhere right now while P67 motherboards are harder to find at the moment. The main advantage the second-generation i7 provides is efficiency. It's slightly faster at stock speed and overclocks higher, but consumes
much less power--especially at idle. My i7-2600K system idles around 60-65 watts, which is less than half what my 3.0 GHz Core 2 Duo system used. I thought my power readings were wrong at first...
The main reason I proposed the i5-2500K build first is that my i7-2600K build cost around $1800 total. A full computer needs several more components than the ones I listed, of course, and they add up fairly quickly; you'll need a decent case, at least one hard drive(s), one optical drive, and an operating system. Windows 7 Home Premium OEM is $100 by itself, for example. I might have been able to bring that figure down to around $1500 with some changes but it would be a stretch. $1600 would be easily doable, though. (My case, power supply, processor heatsink, two enterprise-grade drives, and OS all cost a bit more than average, so there's clearly room for savings.)
The integrated graphics are indeed a bit of a waste with the P67 chipset, though the upcoming Z68 chipset enables the integrated GPU so you can use QuickSync for fast video encoding. It doesn't take up all that much space on the die so it doesn't really hurt anything being on there. It also lets Intel serve two different markets with the same chip family so there's some economy of scale.
The GeForce 570 is neck-and-neck with the 480 in most benchmarks (some faster, some slower) as architectural improvements and increased clock speed compensate for the reduced shader count. It draws less power, produces less heat, and has a quieter cooler. On Newegg, at least, it's also significantly cheaper ($350 versus $400+) since the 480 is now end-of-life. I personally think the 580 doesn't provide enough benefit to justify the $150 higher cost, but it's always an option. You could also go with a second 560 or 570 in SLI if that's how you roll.
Memory above 1600MHz doesn't seem to provide much benefit beyond higher memory benchmark scores. Real-world benefits are fairly limited and not worth the price premium. You could go for 4x4GB if you needed more RAM, but I've found 8GB more than sufficient so far. (Windows 7 is more efficient with memory than Vista was.)