Well firstly, it's not a bad PC at all, you've done fine.
Secondly, the obvious first upgrade would be more RAM. This won't require new Power supply, just get some cheap stuff and put it in. But cheap corsair or kingston etc is nice ie value line.
Next, if you want to play games, even a £50 budget will give a massive upgrade but if you don't want to play games it will be fine.
Finallly, if you do want to play games but have no money, play some of the many great games that will run on your pc anyway. There are loads of great games that will run on almost any PC that is modern like yours.
Oh and FSP power supply is good, not the best but generally reliable in my experience.
ATI 4670 is a nice card that needs no extra power from the PSU but is quite fast and quite cheap.
Finally, don't worry about getting convinced to get the best PC ever, you already have a machine that will let you do/ use lots of good / fun programs. Spend what you can afford and don't worry about what you can't.