Looking to upgrade my computer in any way $400/500

[phanta]

Hello,
Sorry I am a complete beginner to upgrading computers and stuff like that.
I have an old computer in my basement and I wanted to upgrade it (people says its cheaper). I want to know what i can upgrade to and the prices. I am hoping to spend only $400/500 on upgrading to gaming computer. Here are my Computer Specs. I am copying things off of HWiNFO.

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Computer Brand Name: Hewlett-Packard HP Compaq dc5750 Microtower

Motherboard Model: Hewlett-Packard 0A64h

Processor Name: AMD Athlon 64 X2 3800+

Original Processor Frequency: 2000.0 MHz

CPU Brand Name: AMD Athlon(tm) 64 X2 Dual Core Processor 3800+

Motherboard Chipset: ATI RADEON Xpress 200 (RS482) + SB600

Motherboard Slots:2xPCI, 1xPCI Express x1, 1xPCI Express x16

PCI Express Version Supported:v1.0

BIOS Manufacturer:Compaq

BIOS Date:05/18/07

BIOS Version:786E3 v02.25

Super-IO/LPC Chip: SMSC SCH5317

Total Memory Size: 1 GByte

Video Chipset: ATI/AMD Radeon X1300 (RV516 PRO)

Video Memory: 256 MBytes of DDR2 SDRAM

Video Card: ATI/AMD Radeon X1300/X1550 (RV516) [ATI/AMD]

Video Bus: PCIe v1.0 x16 (2.5 Gb/s) @ x16 (2.5 Gb/s)

Memory Bus Width: 128-bit

PSU: 300w

OS: Windows 7 Ultimate
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I know that the computer is bad. I just want to upgrade it. It sounds fun.
Sorry if I posted wrong/not needed information, I didn't know what to post for specs
and went and posted everything that seemed important. If you need anythign that i forgot, please tell me. Thanks for the help!

 

[tsnor]

Things you can upgrade and carry to a new computer:
- Video Card <-- this is the big one
- Power Supply
- Disk Drive

Things you can upgrade hat work with your MB but CANNOT move to new computer.
- Memory
- CPU upgrade

What I'd do:
Get a good video card in the $150 to $250 range.
Get a good $40 power supply (antec vp450 for example)
Get 2GB of memory that you will end up throwing away when you upgrade CPU/MB in the future. $30

Game for a while. If it's just painfully slow then get an i3 based system ($200 to $400) or a case/MB/CPU/Memory and add in your video card and PSU.

You could also just start by getting the new PC. There is nothing you can really do with your current CPU/MB combo that makes sense. But it might be fast enough for you.