You are basically then just building a new PC.
Looking at the motherboard, it is Socket 775, but it does not support the Core2duo's.
So you are basically stuck with what you have in terms of CPU.
With the memory, I cannot from that link find any mention of what you have in there already.
But the motherboard states
# Support for single-sided or double-sided DIMMs (DDR2 400 / DDR2 533)
# Support for up to 4 GB system memory
So it is good that it has DDR2 support. Therefore defending on your OS, you could increase this.
If you plan on keeping XP I would say any more than 2GB is an overkill, if you plan on using Windows 7, then you would need to check if your CPU has x64 support (there is apps to do this) and if it does I would say to get 2x2GB and use Windows 7 x64.
I say this as really 2GB is the minimum for smooth use of Windows 7, and going over this would likely be 4GB and you would be losing this final gig if you went for x86 W7.
The main things I would recommend to upgrade are (in order of benefit).
1. The memory if you are currently using 1GB. (note your Motherboard does not seem to support PC2-6400, so either this
http://www.overclockers.co.uk/showproduct.php?prodid=MY-097-CS&groupid=701&catid=8&subcat=144
or this
http://www.overclockers.co.uk/showproduct.php?prodid=MY-229-CS&groupid=701&catid=8&subcat=144
2. The Hard Drive, either go for a Samsung Sinpoint F3 1TB. Or a cheap SSD (the new budget Intel SSD which OCs sell for £93 will be a huge speed improvement and take the load off your CPU and your memory).
http://www.overclockers.co.uk/showproduct.php?prodid=HD-082-SA
or
http://www.overclockers.co.uk/showproduct.php?prodid=HD-006-IN
3. Improve the graphics card, my suggestion woud be an ATI 4670, ATI 4650, which are all round good cards, cheap now due to the release of the 5670 yesterday, but do not need separate power cables from your PSU.
So if you wanted you could even go for the ATI 5670.
If you wanted to upgrade your PSU this would be a fantastic buy
http://www.overclockers.co.uk/showproduct.php?prodid=CA-017-CS&groupid=701&catid=123&subcat=