I didn't know there were cases of Hz ratings advertised in total instead of per core, but I guess only the shadiest dealers try to fool people with that; I've never heard of it. At least if you look the model at AMD or Intel's websites they will have the rating per core. And CPUs under 2 GHz per core aren't being made any longer either, except for netbooks and tardpads.
The point's that the multiple cores don't create compatibility uses, and one of the four cores of a modern CPU will be more than enough for any old game. Old single-threaded games will simply use one of the cores only. At any rate the bottleneck with games is very seldom the CPU, but insufficient RAM or the GPU. Actually because of this, games have been very late at adapting to multicores, many games made even today don't use more than one core (including DOSBox so far, which is too bad because that for one is CPU intensive).
I've actually heard about the Dark Engine (System Shock 2 etc.) giving trouble in multicores, but it can be fixed with a community patch. And AFAIK it can only be due to something like the game creating multiple threads (which was possible long before multicores existed) for whatever reason, but then relying on them running in a single core or else a race condition would arise; this would be a bug. I'm not aware of any other game having trouble because the number of cores, it shouldn't have any effect, except that you have the rest of the cores free for other background tasks.
Since you can't find a single core--and it wouldn't make sense to want it--there's no reason not to choose a quad core. It's true, though, that games even nowadays aren't often the programs that benefit most from the number of cores, or core speed for that matter.
I assume the Windows 7 you're getting is 64-bit? 32-bit OSes, including all editions of XP except Pro x64, will have no problem running if you have more than 4 GB of RAM installed, except that
they won't use it. Actually they won't use anything above 3 GB or so because of the space reserved for other hardware memory. Don't confuse this limit to physical memory with
the 2/3 GB limit to (virtual) memory accessible to each program.
Programs for Windows 32-bit work just fine in 64-bit (
WoW64). If there are compatibility problems they're more likely caused by the Windows edition (7 vs. 9x or XP) than by bitness. But it's true that 16-bit programs won't run at all in Windows 64-bit; but in Windows 32-bit NT/XP they run in emulation (
NTVDM) anyway, not natively. It's not worth it to stick to obsolete 32-bit because of compatibility, considering the RAM ceiling (which is the reason to move to 64-bit at all).
For compatibility you can have, besides DOSBox and Virtual PC, which is what I stick to, multiple boot with XP or 9x, and you'll continue to be able to use 4+ GB of RAM in your Windows 7 x64.
Those specs you're considering aren't high in my opinion, not only the CPU. 4 GB is indeed the minimum computers pack nowadays, and anyway I bought DDR3 1333 MHz at under 10 €/GB one or two years ago. If you want more RAM plan ahead now, otherwise you may be sold more sticks with less GB each that will use up too many board slots.
500 GB isn't a big HD nowadays; I've just happened to buy a 2 TB HD (cache 64 MB) for 110 €. (If you wanted more than 2 TB,
only Vista or higher would be able to read the disk.) I know practically nothing about graphic cards, I can only tell you I have
this one which is nothing fancy while having 1 GB, and it cost me 56 €.
I don't know about Canada, but I can give you this Spanish price (
in euros) from a flier I happen to have at home, and I don't think they should be very different in Canada except taxes (sales tax alone is 21% here).
399 € including taxes
Intel Core i3-2120: 2 cores, 3.3 GHz, 3 MB cache, 65 W TDP
6 GB DDR3 RAM
500 GB HD
nVidia GeForce GT620 1 GB dedicated
Windows 7 Home Premium
Keyboard and mouse included