With your intended use, you could probably get away with 256 MB RAM. I would suggest 512 MB, though, since newer programs always seem to get bigger and bigger. (BTW, to see how much RAM you are using right now in WinXP, right-click on the taskbar, go to Task Manager --> Performace tab --> PF usage.) The Socket 939 CPU can run in single channel or dual channel memory modes, but the performance rating (3200+) assumes dual channel. Single channel does work, but it is slower. For dual channel, buy 2x256 MB RAMs, preferably of the same type, and install them according to your motherboard manual.
The ATI graphics cards that you hear about are for gamers, but they have a lot of lower line graphics cards for total non-gamers like you. Take a look at something like the Radeon 9200SE, for example. They are often fanless, come with DVI, and are very inexpensive.
You can probably get away with less than 400W. Heck, I have an Athlon XP 3000+ and Radeon 9800XT running on an Enermax 380W power supply, and that system was running on an older model Enermax 330W before I upgraded the power supply because of noise. Factor in that you will have a lesser graphics card, and you will probably be looking at 350W or possibly less. You just want to make sure you get a decent quality power supply. Most of the ones reviewed here are good quality.
Flashing a BIOS:
Usually you do this if the motherboard manufacturer fixes some sort of bug or makes some sort of enhancement. If you can find some release notes for the BIOS, it is often worth reading those to see if it is worth the trouble. If you see no reason to update the BIOS, then do not bother. The process usually involves loading the BIOS file onto a floppy, rebooting the computer, and running a utility to load the BIOS. Some manufacturers have Windows programs that will do this for you. It varies from company to company, so it usually pays to read their exact directions.
The days of having to configure IRQs are long gone, thankfully. This used to be a big deal in the days of ISA cards, when two cards using the same IRQ would lock up the entire computer. With the advent of PCI cards, however, sharing IRQs is now allowed, so IRQ configuration is mainly a thing of the past. There used to be some issues due to buggy hardware or drivers with some PCI cards, but PCI has been long around so long now that I see no excuse for that.
Set the BIOS to boot directly from the Windows XP CD-ROM. This will lead you through a setup program, part of which includes partitioning and formatting the hard drive. Just follow the directions and let it go. Since you are using an SATA hard drive, I do not know if the SATA drivers will come included in the WinXP CD. If the installation fails because it cannot find an SATA driver, there is an option at the very beginning of setup that says "press F6 to load 3rd party SCSI or RAID drivers", or something like that. At this point, you will hit F6 and insert a floppy with the SATA drivers. Again, this is only if Windows cannot find the SATA drivers on its own.
Once you have installed Windows:
If your WinXP already comes with SP2, then this will help a lot, as it will save you the trouble of downloading and installing a bunch of updates. The motherboard will probably comes with some sort of driver CD. It is not always 100% up to date, but it should be enough to get you started.
Hope this helps.