If you have the time and patience to replace the hardware on the Dell, go for it. Since this is likely a store-bought machine, and if you have the funds, might as well buy a new computer instead.
If you can reply back with a motherboard make/model number, we could provide more detailed feedback as to which CPU you should buy. Motherboards have certain CPU socket compatibility and this is important to know when shopping for a new CPU.
As for the power supply, this will vary depending on what video card is on the computer and what extra peripheral devices you may have attached to the computer (sound cards, joystick, controllers, etc). You might want to look at PSU requirements for the devices you are using on that computer to get a base requirement as a start.
400/550W power supply would probably be the average PSU that is installed on the basic store-built computers at places like Best Buy, Office Depot, Staples, etc. Make note of the size of the tower. If the tower is a slim, make sure the PSU you are looking at is able to fit in the PSU compartment in the tower.
Hope this helps!