New half system build, advice really appricated. Thankyou

Hello everyone, i recently got back into gaming after a long break and so decided that i needed to slowly upgrade my computer to make games playable, but ive ran into the whole motherboard not supporting duel core and me only having a single core barrier and so i decided that i need to upgrade a bit.

After upgrading a bit here are my current specs.

Dell optiplex GX280 small desktop computer

Pentium 4 processor 2.88GHZ hyperthreading.
3gig DDR2 ram
80gig SATA hardrive
Radeon HD 4650 512mb DD2 320 core processors (low profile and pci-express)
210watt psu  
Duel desktop with a: Hp w1907v 19inch widescreen 1440x900 and a samsung syncmaster 192n 4:3 aspect ratio 1280x1024.

I decided that the parts that im going to have to upgrade are the psu ( cos mine is tiny ) new motherboard and duel core processor, and a new cool case. I'm going to a computer to buy it i thinik within the next to weeks and am going to have a budget of about £160. I think its possible beaause the place that i am going to is really really cheap ( my friend bought a 19inch TFT monitor for there for only £35)

My question to anyone who is willing to give me advice is what processor should i get, intel or AMD and are there any suggests as to what psu and case and motherboard i should look out for when at the fair.

Thanks in advance for any advice or suggestions that are given.

Adam