Advice on updating PC... All opinions welcome

APPROXIMATE PURCHASE DATE: Starting right now

BUDGET RANGE: as cheap as possible

SYSTEM USAGE FROM MOST TO LEAST IMPORTANT: gaming, surfing the internet, watching movies

PARTS NOT REQUIRED: keyboard, mouse, monitor, speakers, OS

PREFERRED WEBSITE(S) FOR PARTS: newegg.com

PARTS PREFERENCES: n/a

OVERCLOCKING: Yes / No / Maybe?

SLI OR CROSSFIRE: Yes / No / Maybe?

MONITOR RESOLUTION: does it matter? I'm using a 26" lcd tv

ADDITIONAL COMMENTS: looking to upgrade one piece at a time, but don't know where to start. I know I need a new graphics card... that's a given, but i don't think my power supply can handle it. It's 300W max I believe.

This is what I have... a stock HP Pavillion a1620n:
Processor - Intel Pentium D 3 GHz
Chipset - Intel 945G Express
Installed Memory - 1 GB (DDR2 SDRAM 533MHz)
Graphic Processor Intel Graphics Media Accelerator 950
Mobo - Asus P5LP-LE

Fry's (stores only) has a 4450 amd cpu with board for $69.99 (ends today) or the e5300 with biostar board for $89.99. Both will work fine. I'd get ddr2 memory now before prices go up. Amazon.com had some crucial ballistyx 2x2gb for $45 shipped before a $20 rebate. Newegg.com has the e5200 with board for around $112 shipped. You can add a video card and power supply later. Newegg had a msi 9800gt for only $59.99 after rebate yesterday. It was a shellshocker deal and probably sold out in minutes. Look for more deals like these as you begin your new system. Be patient, and wait for the deals before pulling the trigger, especially if your old system still works ok.