I'd say your main things to upgrade are the RAM to at least 1Gb pref 2Gb and a graphics card.
On that front I'd say go for an 8-series from Nvidia such as an 8600GT.
PSU, if you have around 350W you're fine. Anyless I'd say upgrade to 350-400W.
Also you might want to look at getting an aftermarket heatsync for your processor and overclocking it to get better results.
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