Sahil_kr :
I have this System for Around 2 Years,so i think so that it could not be sold at this Much($300)
Yes you can. Here's worse computers for a higher price:
http://www.bestbuy.com/site/Compaq+-+Presario+Desktop+/+AMD+Sempron%26%23153;+Processor+/+2GB+Memory+/+500GB+Hard+Drive/9963938.p?id=1218202472178&skuId=9963938
http://www.bestbuy.com/site/eMachines+-+Desktop+/+Intel%26%23174;+Celeron%26%23174;+Processor+/+2GB+Memory+/+500GB+Hard+Drive/9974267.p?id=1218204533255&skuId=9974267
http://www.newegg.com/Product/Product.aspx?Item=N82E16883108390
I said $700 is a good build price because $400 that you can't spend any more than plus $300 of the system you have adds to $700.
One thing you mention if that your CPU does not support virtualization. This is true but you failed to mention that you do anything that would use it. So I will assume that you just forgot to mention some kind of virtual stuff you do.
Anyway, if you are set on keeping your current setup, here are my recommendations for upgrade:
CPU:
http://www.newegg.com/Product/Product.aspx?Item=N82E16819115057
-Highest 775 quad core with the price. Also it supports Intel-VT-x
-Quad core for ability to play greater variety of games (dragon age, BFBC2, FSX).
Alternative:
http://www.newegg.com/Product/Product.aspx?Item=N82E16819116347
-high clocked dual core for great performance in most games.
-supports intel VT-x
Notes: If you are doing a lot of virtualization, depending on your situation, the quad will be more worthwhile.
Ram upgrade:
[strike]http://www.newegg.com/Product/Product.aspx?Item=N82E16820146693
-4GB extra of memory to 6GB for better virtualization[/strike]
^correction: motherboard listed only officially supports up to 4GB total system memory:
http://downloadmirror.intel.com/15064/eng/DG31PR_ProductGuide01_English.pdf
Alternative:
http://www.newegg.com/Product/Product.aspx?Item=N82E16820226086
-2GB extra memory to 4GB total for "sweet spot" gaming
Video card upgrade:
http://www.newegg.com/Product/Product.aspx?Item=N82E16814161338
-fits remaining cost to $400
-good card that can play all games. Will have to lower settings on newer games at times.
-Nvidia alternative: GTX260
If you opted for the lower end parts you could have enough to spend on this card:
http://www.newegg.com/Product/Product.aspx?Item=N82E16814161349
-excellent performance in all games.
-some games lowered settings
Nvidia alternative: GTX470
Other good options performing between the two are the GTX460, 1GB or 768GB (1GB performs better, because of additional features not additional ram) or the radeon 6850 or 5850.
Just a note: Make sure your power supply is up to any upgrade tasks. If it isn't, spend less money on the upgrades and put some towards a new power supply.
Another note: When you get windows 7, here are the drivers for the board. Under downloads:
http://www.intel.com/p/en_US/support/highlights/dsktpboards/dg31pr