- Software Development (for Direct3D, Windows, and web)
- Games (flight sims being the most power hungry examples)
- 3D graphics rendering (in Bryce, trueSpace, etc)
- 2D graphics editing (in Paint Shop Pro)
- Multitrack digital audio recording and editing (Sonar, Wavelab)
- DVD viewing (using PowerDVD, probably)
- Video editing (only infrequently, performance is not a major
concern)

Sounds like you will get a big performance enhancement if you just start
with 2 sticks of 512MB RAM instead of one.

Q) Should I put in a separate DVD reader to avoid wear and tear on the
burner? In the past I thought it was better not to use a burner for a
primary drive, but perhaps that is not the same sort of issue anymore?
(I don't have any need to rip and burn simultaneously.)

You could add a CD-RW as a primary drive for $30-40. Or you could get a
used CD-ROM drive on eBay for peanuts until you get some more money.

Q) Is the Radeon 9800 Pro a good match for this system, or will some
of its power be wasted? Should I step down to a 9700 or something? I
do very much want good Direct3D9 performance that will last me for a
while.

It honestly depends on your video resolution. A 15-inch monitor with a
max1024x768 resolution may never need to harness the power of a 9800pro.

I have a $70 Geforce 5200 ultra in my gaming system and I haven't seen a
real need to upgrade yet. If I were buying today I'd probably get a
9800pro, but if you're strapped for cash you could certainly get a 9600pro
or something similar and still play new games.