That is the standard upgrade that most if not all folks (including me) advise. Upgrade your VC and PS (if needed) and look to carry that over to a new build later. By no means is that a bad solution, in fact its probably the best course of action for most people. With my wifes PC that option wasn't possible. So normally you'll keep your OS, HD & Monitor and recycle the case if you can. So you need a MB, CPU, Memory & GPU.
The E7400 is $115 on newegg today and the 550 far exceeds it, the 8400 is $168.
Browsing the 700W+ PS's nothing decent under $100 (including rebate)
At todays prices a 250GS is about $110
MB can vary a lot, U can get a decent DDR2 board for as little as $80 add $30 for 2G of decent memory and your at roughly $500. You can do it for less but then you get to marginal levels...weak CPU or VC or PS and you still spend $400.
So to me to spend $238 total (after $30) rebate on the MB for a CPU/MB combo that will run well on a 400W 24pin ATX PS. I went ahead and ordered a 500W PS with a view toward upgrading the entire box for the future.
http://www.newegg.com/Product/Product.aspx?Item=N82E16817341016 Now this isn't going run AH maxed out and I can't say with total certainty that it won't have any playability issues but for a person who either is forced to upgrade or is looking at building/upgrading a system but can't justify additional cost just for AH here is a basic mainstream build with decent playability and a solid overall performance level for varied applications.