How to know when to upgrade RAM

I've been using m 2002 Dell running XP for years now but its just getting slower and slower, its only got a measly 1gb of RAM and I'm a little scared to go poking around inside. The HDD is about half full and its a 150 gb system. I was thinking of just backing up everything and reinstalling XP. Should I bother or just upgrade the RAM to say 2gb or 4gb? Or at this late stage is the Mo-bo even worth upgrading?
Thanks in advance!
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  1. EDIT: Some info (Im a newb with the hardware side of computers...I know my way but not what to buy and where) the PC I have has an Intel Pentium 4 CPU 3.20 GHz ( I checked the system devices and it comes up twice (Dual Core?) the graphics card is an AMD Radeon x800.
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