Upgrading a Dell GX280

Sorry if this is the wrong spot for this.

Looking to set up a computer for my Father-in-law. the best base system I found sitting around unused was a Dell OptiPlex GX280 mini tower. 2.8 GHz HT P4 915G/GV chipset w/ 4 slots for DDR2 and a PCIex16 graphics slot, a 305 watt PSU, and running XP pro. The other options were a couple of older Dells with DDR1, AGP and socket 478 P4s w/o ht.

I am thinking of picking up 2x 1 gb of DDR2-800 and an ATI 5450 card. to get it up to snuff and keep it usable for a few more years (assuming he doesn't get into gaming). is the DDR3 version of the card worth the 20% price boost over the DDR2 versions?

while I understand that the proposed add-ons wont be fully utilized with this old system, does anyone see any problems with what I have in mind? is it worth using the old 2x 256mb memory chips too, or just leave them out. I know ATI says I should have a 400 watt PSU, but I'm guessing that is a conservative estimate and assumes I might have a much more power hungry CPU.

Thanks.