What do you plan on doing with the system? Gaming? Video Editing? web surf?
Anyway, have you checked into whether your current mobo can support a P4 3.06 HT (B/533 bus). If so, that is still a pretty decent chip although at $200 not cheap. But it's an easy cpu swap, meaning no reformat HDD/ Install OS again needed.
What is the rest of your system? Need a video card upgrade for gaming? $350 for a GF6800GT or X800 Pro would fit your budget.
Otherwise, if you upgrade mobo/cpu/ram to something fairly high end, you probably won't have much money left over for a Video card.
ABIT IS7, P4 2.6C, 1GB Corsair XMS 4000 Pro Series, Radeon 9800 Pro, Santa Cruz, TruePower 430watt