Honestly I don't think it is worth it, as much as that sucks to hear. Looks like it's a PCI-e 1.0, which will bottleneck any modern GPU you put in it, RAM is about the only thing you can do to it, but yeah. Not worth it.
Your PC is completely obsolete and Windows XP is dead. There's not much you can do with $500 unless you just want to play mid-range games at 720p on an AMD A10-6800k build with integrated graphics only.
I originally built mine for $300, already having a HDD and PSU. Was a piece of dirt but got the work done. Now parts are cheaper for the bang you get out of them and you can get a decent budget build for 500-600 if you have a monitor and peripherals.
This is a very quick build, you could fine tune it but it should look something similar to this:
CPU: AMD FX-4300 3.8GHz Quad-Core Processor ($104.98 @ SuperBiiz)
Motherboard: ASRock 970 Extreme3 R2.0 ATX AM3+ Motherboard ($59.99 @ Newegg)
Memory: A-Data XPG V1.0 4GB (1 x 4GB) DDR3-1600 Memory ($39.59 @ Amazon)
Storage: Hitachi Ultrastar 1TB 3.5" 7200RPM Internal Hard Drive ($54.00 @ Amazon)
Video Card: Asus GeForce GTX 660 2GB Video Card ($169.99 @ NCIX US)
Case: Aerocool Strike-X One ATX Mid Tower Case ($48.47 @ NCIX US)
Power Supply: Corsair Builder 500W 80+ Bronze Certified ATX Power Supply ($44.99 @ Micro Center)
In general for that budget you want an FX-4300 or 6300 (~$100). There are a few GPU options. The 660 runs the newest games at medium-high on 1080p and only costs $170. This is the part you can downgrade if you need to reduce costs. You only need 4GB of RAM.