While the Celeron stinks for gaming, its true, the system described isnt SO bad. It needed alot more RAM, 256megs will barely run Windows XP let alone do any gaming. Add a slow CPU to that and it would be gaming hell. Put 2 gigs of RAM in it, a decent video card, and it would be a whole different ballgame.
New computer would still be better, but not everyone can afford that option.