I'm running XP on a 450 Mhz Pentium II PC and have upgraded everything to the max allowed by the mobo. How much of a challenge would it be to replace the mobo, cpu, memory, and sound and graphics cards while keeping everything else from the existing setup, including the two existing hard drives? One hd is dedicated primarily to Windows, and the second to a bunch of other programs and files. This was originally a Windows 98 box that I upgraded to XP. I do still have the XP upgrade CD. Over time I've either replaced or added everything in the box except for the mobo and video card, but that's the whole of my hardware-tinkering experience—I've never done anything nearly as drastic as what I'm asking about. Any suggestions or book or instructional article recommendations?
Your HDDs are likely to be very slow relative to new components so you probably dont want them cripling your new computer. You will have to reinstall the OS anyway, it wont boot and run on a different motherboard just by dropping the HDD in. For around $50 you can get a good 500GB HDD that you could copy all your files onto before throwing away the two old HDDs.
There is nothing from a Pentium II build that should be transferred to a new build, outside of a case at best. Your next bigges problem will be new motherboards not excepting OS older than XP for a reinstall, which will be required for the XP Upgrade disk to work.
I think you're pretty much going to need a complete new build, which by the sound of it... you do. You can read my thread post in my signature to get an idea of what type of system you can buy at certain budget levels.