£600 Budget first build or upgrade?

Hi, I'm thinking of buying a new computer, or updating my old one, somthing i hope to clear up in this thread recieving advice from some of the more experienced builders. My current build is a DELL, somthing my parents encouraged me to get they werent too sure on letting me build a computer myself; although i think they trust me a little more now im a few years older. Heres my current build and then ill also follow the template for enquiring about a new build that was stickied. So heres what i know is in my PC:

Intel Core2 Duo 2.13Ghz (I think its Socket 939)
2GB RAM DDR2
320GB SATA HDD (Western Digital)
512MB ASUS Nvidia 8600GT
650W WinPower PSU

And thats as far as my knowledge takes me...

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APPROXIMATE PURCHASE DATE: Early September BUDGET RANGE: £600 The lower the better, Times are hard you know

SYSTEM USAGE FROM MOST TO LEAST IMPORTANT: Gaming, CAD(photoshop, 3dsmax, mudbox), Watching movies, Schoolwork.

PARTS NOT REQUIRED: keyboard, mouse, monitor, speakers, OS, Power Supply(I think: WinPower 650W Model number: PSU-650. I wont lie it was a cheap buy), HDD, Case(?)

PREFERRED WEBSITE(S) FOR PARTS: www.ebuyer.com, www.novatech.co.uk, www.microdirect.co.uk, anywhere in the uk that doesnt charge through the roof for delivery.

PARTS PREFERENCES: Leaning torwards an AMD build, purely based on price i dont know much otherwise (although the lack of an AM3 SLI motherboard worries me), Nvidia 260GTX although anything thats got a good review.

OVERCLOCKING: Yes/Maybe SLI OR CROSSFIRE: Perhaps in the future

MONITOR RESOLUTION: 1280x1024

ADDITIONAL COMMENTS: No big preferences case wise, although i wouldnt mind keeping my current dell case, if it means i can get somthing hardware wise from the £50 I save from it.
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Parts ive been looking at

Novatech GeForce GTX260 OC

And thats about it really, so as you can tell ill be relying quite alot on your preferences/ suggestestions.

The case i currently have is the standard Dimension 9200 this is how it looks:

im not sure if its full tower or what but if you want any measurements or anything, i can pass these onto you pretty quickly. And as for upgrading my monitor, ive thought upon it but ive decided the machine is in more need of the upgrade. I currently have a 19" 4:3 monitor, Which I am happy with. thanks for the Hardware suggestions i'll look them over now

^ dell's take BTX or DTX boards so he'll need a new case aswell