The Core i3 does have graphics integrated onto the chip. I haven't looked at them very hard yet, as they were only released to market the other day. But I don't see any advantage to them over the kind of onboard graphics that you get with motherboards for AMD CPUs. They seem power-hungry in comparison.

I recently built a socket 1366 Core i7. It is a wonderful chip and mobo, but I do think it's overkill for what's wanted here. My rig cost me the equivalent of well over $2500 too.