[edit]Look at the end of the page for what I plan to upgrade, taking into consideration everyone's suggestions as well as some offline.
 
Hi everyone,
 
I'll get straight to the point. And thanks for all the help in advance.
 
I'd like to be able to run some newer games, not with all the eye candy but decently. I'm looking to spend under $1,000 (CDN, but that doesn't really matter with the exchange rate nowadays, does it   hehe)
 
The following was bought for $810, October 2004.
 
Motherboard: P4PE-2X, with 2 RAM Slots, 4 PCI, 4 hard drive bays
 
CPU: Pentium 4, 2.4 GHz
 
Case: Antec Sonata
 
Power supply (from case's manual, not confirmed): Antec TruePower ATX12V, max 360W
20-pin main power
6-pin aux power
4-pin +12V power for motherboard
5 to 7 4-pin peripheral power connectors
2 to 3 4-pin floppy power for drives
 
RAM: 1280 MB
256 MB, DDR 333 PC 2700
1024 MB, DDR - don't know other details (not included in original purchase)
 
Hard drives:
WD800BB-55JKA0 (80.03 GB)
WD1600JB-75GVC0 (160.00 GB) (not included in original purchase)
 
Video card: ATI Radeon 9600 PRO (128 MB DDR)
 
Sound: SoundMAX Integrated Audio
 
A really bad mouse that needs replacing
 
Monitor, speakers, headphones, keyboard all good.
 
Thank you!

Looks like you might need an all-around upgrade. I'm not sure, but you *might* be able to reuse the case. The main thing you need is a new motherboard, which also means new processor, RAM, video card. For under $1000 you should be able to still get a pretty solid system running. To me it seems like your best option is to fresh start, which can definitely be done on that budget.

Thanks for your response, Andy.
 
The Antec Sonata is a really nice case, and the two hard drives are serving me just fine (I have a combined ~1 TB of portable memory which I use for most of my files). The DVD writer is good too. There are about 15 barebones, between 5 and 20 years old, lying around the house - I don't want to add another one =)
 
But I'm ok with upgrading everything else.

$180 - Q6600 OEM (overclock to 3.0ghz+)
http://www.ewiz.com/detail.php?name=Q6600
OR
$177 - E8400 (overlock to 3.8ghz+)
http://www.ewiz.com/detail.php?name=E8400BOX
AND

$36+ 120mm tower cooler
http://www.newegg.com/Product/Prod [...] 6835233003
$6.99 retention bracket
http://www.newegg.com/Product/Prod [...] 6835233019

$184 - X38 motherboard (2 x PCI-e x16 lanes)
http://www.newegg.com/Product/Prod [...] 6813136045

$89+ - 4gb 1066 DDR2
http://www.newegg.com/Product/Prod [...] rchInDesc=

$309 - HD 4870
http://www.newegg.com/Product/Prod [...] 6814102748

$99+ - Power supply with 700+watts and 60amps on the +12v rail (Corsair 750tx, PCPC 750, etc.)
http://www.buy.com/prod/corsair-tx [...] 78325.html

$209 - 22" monitor
http://www.newegg.com/Product/Prod [...] 6824009094

Okay, okay, my list comes to about $1,100, BUT it has an X38 motherboard that will overclock any chip to it's MAX and it has TWO PCI-e 16x slots to take advantage of another 4870 down the road.  The Corsair PSU is also able to power two of them reliably.

Q6600 $190 ( http://www.newegg.com/Product/Prod [...] 6819115018 )
 
Asus P5Q Pro $150 ( http://www.newegg.com/Product/Prod [...] 6813131299 )
 
or
 
Gigabyte GA-EP45 DS3R $150 ( http://www.newegg.com/Product/Prod [...] 6813128344 )
 
4GB PC8500 OCZ RAM $95 ( http://www.newegg.com/Product/Prod [...] 6820227298 )
 
Xigmatek S-1283 $37 ( http://www.newegg.com/Product/Prod [...] 6835233003 )
 
Xigmatek Backplate $7 ( http://www.newegg.com/Product/Prod [...] 6835233019 )
 
Asus' ATI 4850 $195 ( http://www.newegg.com/Product/Prod [...] 6814121253 )
 
Antec Earthwatts 500W $90 ( http://www.newegg.com/Product/Prod [...] 6817371007 )
 
$765 (you may have room for a stronger processor, better graphics card, nicer case, etc.)

Thank you for all your help. Now, would it be an option to keep my motherboard? I realize that this would put me way under the $1,000 mark. At the same time, the more money I save the better. So what if there was that restriction, of keeping the motherboard?

That would negate the whole reason/benefit for upgrading.  Your current motherboard likely doesn't support any contemporary processors/RAM...without a contemporary processor there's no reason to bother, really.

Nothing short of the case is worth saving.
Your best move is to sell your existing System and get everything new.

Here's what I have so far, using the input from this forum as well as some friends of mine.
   
2x OCZ Platinum XTC REV.2 PC2-6400 2GB 2X1GB DDR2-800 CL4-4-4-15 240PIN DIMM Dual Channel Memory Kit
$139.98, http://www.ncix.com/products/index.php?sku=19337
 
OCZ Platinum XTC PC2-6400 4GB 2X2GB DDR2-800 CL5-4-4-15 DDR2 240PIN Dual Channel Memory Kit
http://www.ncix.com/products/index.php?sku=25352
$90
 
ASUS P5Q Pro ATX LGA775 P45 DDR2 2PCI-E16 Crossfire 3PCI-E1 2PCI SATA2 Sound GBLAN eSATA Motherboard
$154.40
http://www.ncix.com/products/index.php?sku=30418
 
EVGA E-GEFORCE 8800GT 600MHZ 512MB 1.8GHZ DDR3 PCI-E Dual DVI-I HDTV Out Video Card *IR-$50*
$169.99
http://www.ncix.com/products/index.php?sku=27704
 
OCZ X-750 Equalizer Laser Gaming Mouse 2500DPI USB Dual Laser Engine
$29.99
http://www.ncix.com/products/index.php?sku=22874
 
Intel Core 2 Duo E8400 Dual Core Processor LGA775 3.0GHZ Wolfdale 1333FSB 6MB Retail
$205.37
http://www.ncix.com/products/index.php?sku=27784
 
Total: $700 (a few cents short)

You're much better going with this RAM (2x2GB is easier on the Northbridge (and, therefore, better for overclocking) and leaves room for expansion)...or is that the one you meant to list (based on the price you've shown)?

Nope, I meant to list the one I listed, so I'd have 4 sticks of 1GB. I do agree it's easier to expand in the future. The price is better: 90 (after rebate) for 2x2GB, or 140 (after 2 rebates) for 4x1GB. So yes I'll change this, thanks!

Heck, I see I neglected to put the link in for the 2x2GB, but you got it.  Yeah, 2x2GB seems to be the enthusiast's choice nowadays.