2.8 GHz is more then enough power. I have that much, and it's FAST. So yes, go with 2.8GHz, you'll notice a good difference from a 1.4GHz.
Also, you may
want to consider getting a better graphics card. Such as a GeForce 6200. It's a good card and performs well. I don't know if you're a gamer or not, but if you aren't then that's a good card. If you are, then get something better, such as a 6600GT.
You're also using AGP, so don't buy a PCI-Express card!!!