Upgrading an old Northgate PC, need help

I been planning to build first PC for a while now, just never got started. A lady at my church gave me one of those old Northgate computers because the video was going out. I tried to fix it but it was no use. Then I got a flash of an idea. I saw that the case could fix a Micro ATX board (being that one was already in it). I could possibly salvage the case, hard drive, card reader and optical drive and upgrade it. I wish listed a few things but I was wondering if I could pull it. I don't want to go too expensive being this is my first PC. I decided to go with the following parts:

Pentium D 2.5Ghz

580W PSU

Intel LGA 775 Micro ATX

XFX Geforce 8600 GT

Kingston 1GB of Ram

with everything it willl come to 315 w/o shipping.

Do you think it is worth it or what?

The P5K-PL is overclockable some but not huge. The e5200 would do 3.1 almost 100%, maybe more.

Short answer: NO.

Long answer:
It depends on your objective.
For general surfing use, you can't beat the pre-built prices from Dell, Lenovo, etc
For gaming, you probably want a stronger system.

Pentium D is old and hot, the case may not have adequate cooling.
1gb is not enough today.
There are no good cheap 580 watt psu's. The PSU is not the place to go cheap.
The hard drive are probably slow, low capacity IDE drives with possible problems.
You will need to also buy an OS.
8600GT is ok.
If you want to play around, see if you can buy some parts on e-bay cheap.

Still, I would encourage you to set a budget and build one yourself. The experience is priceless.

Actually, I got it only up to 3.258 ghz. I got a question. I know it supports dual channel memory, but I only have one at the moment. Does it make a difference in overclocking? It's a stupid but valid question I know.

Also, I read up on that Asus mobo. It's limited because the cpu/memory divider is locked. So, getting faster ram is the only way to compensate.