Well I ran a P4 2.8Ghz 1.5GB ram from about 2002 to 2009 and the only thing that ever failed in the system was a power supply it was a cheap startech power supply though, but I did switch video cards about 3 times in that time period. (ATI 9000 pro/ATI 9600/and X850XT)
And I still have a P3 800Mhz 1GB ram system running Windows Xp in my spare room that still works just fine. Think I got the P3 system back in 1999 to replace my Mac (performa 5260). Of course though its not really good to run todays programs very well, its really only good for email and browsing the internet. And the only thing to ever fail on my P3 system is a Maxtor hard drive, I remember freezing the drive to try to retrieve some data off it before it completely died.
So yea you can make a system last a long time if you take care of it properly and protecting your system. And I don;t think you need to upgrade your video card every year, even if you are a gamer, I had a ati 850XT for about 4 years and ran games just fine. So no you don;t need to upgrade a video card every year or so, its more of a "want"
Although I still have both of these system neither one really gets used anymore, the question comes down to how long will the system preform to your expectations. If your a hardcore gamer or performance junky your going to want to upgrade a lot. If your just a casual gamer/surfing the net/email/ you probably won;t upgrade to often. But again some hardware does fail over time no matter how well you take care of it.
And I agree with re-formatting and reinstalling windows every once in awhile, theres nothing like a system with a fresh install.