SATA drives arent terribly expensive but significantly faster.
If you have the bucks to do a RAID (2 drives), you'll see a I/O boost. I always go RAID 1 (mirror). RAID 0 is faster but if a drive chugs, you've lost it all. If your machine is a dedicated game rig and all your important stuff is on another PC, no problem.
I've only had one system I had to call MS when re-registering. Its all automated...make sure you have speakerphone, its vastly easier
If you have some bucks (by not going RAID), I'd really encourage you to go from 512 to 1GB (or even 2gb). Its a huge kick in the pants to go from 512 to 1gb and a really nice one to go from 1GB to 2GB
I dont know where you shop...BestBuy, NewEgg, etc but there are a lot of really sweet cards for $150-$189 to choose from. 256mb, etc. I think the ATi 1600 series is in that spot as are some GeForce 6800s. I prefer nVidia myself while I know others, like Skuzzy, have ATI pajamas, bedsheets and have custom "ILUVATI" on their license plates
All mocking aside, they make a really nice card. So in short, for not a lot extra, you can upgrade the video...I know I read all the new graphic card reviews and am amazed at the $495 pricetags and higher.