God I hate recommending 'upgrades' using out-dated products. My personal opinion is it's better to save up your money and spend it in a larger chunk down the road, then make smaller more abundant upgrades.
Here's the problems I see with that rig, now remember this is my personal opinion and I'm sure others will come along as well.
- It's a Pentium D, non dual core processor. It's about 2 1/2+ years old (since the processor was launched.
- Biostar? Pretty low-end motherboard manufacturer.
- Micro ATX motherboard, yuck.
- Onboard worthless video. I'm not sure what card you have now, but I'm sure it's AGP.
- Low end PSU, I never recommend cheap power supplies. Too many bad PSU's in my experience frying more expensive equipment. You generally find these in kits most of the time.
- $30 mail-in rebate
- Old motherboard northbridge chipset
What is good about it?
- Cheap
- Motherboard can suport newer Intel Dual Core chips
- Ram seems to be quality
Your Althon XP is what, 6 years old? I don't recommend upgrading to a processor that almost 3 years old. Save your money. $400-$500 can do a nice rig these days. If you're willing to plop $180+S/H (before rebate) for this system, why not put that money in a bank and wait a little longer).