That system would be very good after you updated
As for me, i'd spend the money mostly on cooling of the parts, while giving silent operation.
I'd also probably update my sound card to allow for a Dolby Pro Logic 2 decoder, and couldn't forget the Logitech 5.1 speaker set
If I still had money, I'd probably go for dual core, and maybe up my RAM to 2GB.
I wouldn't bother updating my video card at this point in time. It'd be more spent on silentness/making my usage more enjoyable, since I don't play games all that much.