Figuring out New PC parts as on Aug08

I have this system which was assembled in July 2004:

CPU: AMD Athlon 2400+ (Thoroughbred); Socket A; L1- 64KB, L2cache- 256KB. Core speed – 2.0GHz
Motherboard: MSI K7N2 Delta-L (model MS6570), chipset: NVidia nForce2 Ultra 400
RAM: Total: 1GBDDR (1280MB) [split across 3 slots- slot1- Hynix512MB PC2700(166MHz), Slot#2- Corsair 512MB PC3200, Slot#3 - Corsair 256MB PC3200]
Video AGP card: NVidia GeForce4 MX4000 (64MB video memory).
Hard disk: Total 200GB = IDE HDD 120GB Seagate7200 RPM + IDE 80GB Seagate7200RPM
Display: 17” CRT Samsung syncmaster 793s
Speakers: Creative Inspire 2.1 2500
Power Supply: A local-make 400W power supply

Scenario I am facing is this: Many of my friends too are having same kind of problems:
* I am avid movie watcher & with this system I can’t watch HDRip movies; movies with 1080p quality with excellent audio quality too.
* I want to run multiple OS: RedHat Ent Edition, Ubuntu Windows Vista, XP; also VMware workstation with various flavors of Linux, Windows Vista.—with my present system I can do this but run short of space, speed.
* I don’t play games much, however I want to play some games with decent quality like car racing, etc.I can’t play latest games as PCI-Express card is needed.
* I may (mostly) be running softwares such as dynagen, dynamips (a router simulation software which GOBBLES CPU)

My Questions:
1. Is there a way to add a video card alone to the above system such that I can watch HDrip, 1080p quality movies n stuff?
3. Should I (read, is it wise to) upgrade the system? I am in INDIA.
My budget: CPU + Motherboard + RAM + HDD(optional) = around 350 $ (around 15000 Indian Rupees)

3. If I should upgrade should I go for Intel or will it suffice with AMD?
4. Should I go for ASUS M3A78-EMH HDMI AM2+/AM2 AMD 780G HDMI Micro ATX AMD Motherboard + AMD Athlon 64 X2 5200+ + 2GB DDR2 800MHz RAM
Intel? If Intel, which processor and mobo combination?
6. Be it Intel or AMD, Please let me know a motherboard which has onboard video that can play HDTV (future proof to an extent) or at least Is there any new motherboard (in case I have to upgrade) be it INTEL or AMD, which has onboard graphics which can play decent level of games, HDTV rip (1080p) movies?

I request you help me out in figuring out what to choose.

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More about figuring parts aug08
  1. Let's close the deal. Look at these screenies & videos. I beat Dirt (rally; single & multiple cars races) a few times over. From Rookie to Clubman to Amateur to some Pro-Am. Haven't gotten to Pro yet. I'm playing Grid (street & circuit races). Unlocked all tiers for US, EU & Japan (love the non-stop drifting). Yes, the games do look as good as the screenies if the pc is capable. These 2 racers got the HDR (when you're coming out of a tunnel, your eyes take time to adjust to the outdoor lighting) right. SEGA Rally Revo looks good, but the HDR is exaggerated.

    1. Yes, look into HD 3870 AGP, but your cpu will be the bottleneck. This card can play the above games.

    2. Def.

    3. Intel beats out AMD at stock or overclocked.

    4. My suggestion for a $350 barebone:

    E1200 $50
    GA-P35-DS3L $90
    2X2GB DDR2-800MHZ $50
    500GB SATAII $50

    $240-ish. You can up the cpu to E7200 which is 45nm wolfdale, and is capable of overclocking to 3.6-4Ghz on air.

    5. To close the deal, throw in a HD 4850 PCI-E. This setup can play both racers maxed out.
  2. Thanks very much, auscanzukus!
    You have helped me . to the point.just what i wanted.!
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