I definitely support building your own. It's actually very easy. Everything comes with instructions and all of the extra stuff you need, and everything is also colour-coded. Picking hardware that's balanced and compatible is probably the harder part. I would pick a CPU first and then build the rest around that, since that's the least compatible part. Motherboard next since those are usually only compatible with one type of CPU (make sure the socket matches the CPU!). Everything else (Hard drive, GPU, RAM, PSU and peripherals (keyboard, mouse, speakers, monitor)) is generally compatible with any CPU and motherboard. Sometimes there are benefits to using a CPU, GPU and chipset (on the motherboard) from the same manufacturer but I don't think it makes much difference.
If you opt to spend less now for more modest hardware, you'll just end up replacing it sooner (provided you're using this computer for gaming or something similar). If you get a higher end computer it will be able to keep up with new games for much longer than a more moderate one.
As for getting 16GB of RAM that is just overkill for gaming and it is not needed in my opininon you should get a long just fine with 8GB RAM.
You also might wanna look at getting one of the new Haswell CPU's that just came out they look pretty nice. The i7's and i5's are currently out and lower end models are one the way (Remeber to get the K model if you plan on overclocking).
Definitely get a good sided SSD. This is probably one of the cheapest impovements that you can make to a computer that drastically increases preformance. You will see much better load times on games, file transfers, boot times, basically everything.
And if you do go the custom built desktop route remember to think about cooling when you pick out your case.
Other then all that bulding a desktop computer is pretty straight forward and a lot easier then it used to be. As chris said the only compatitibily issues you should have to worry about is your motherboard and CPU (Make sure they have the same socket) other then that most things are compatitble.
If you do have questions on certain parts and what you need I would be glad to help you pick out your build and I am sure many other members have a good amount of experience with computer hardware.
Im gonna get a proper desktop soon, i want it to be up to spec for "Elite dangerous"
Im gonna get a desk and a decent seat with a cup holder on too, im gonna be soo organized, im even gonna have a network and stuff, gonna be doing computer science so I may as well get my shizzleshnits together, im really excited :D
I wonder how good the best computer I can get for £400 ish is gonna be?