As long as your current version of WIndows work, it's fine. Windows XP Pro is already the upgraded version. The only problem you may have is installing the Service Packs on a crack version of Windows. Better just to buy a new version of Windows XP w/ SP2.
You can upgrade the video card to this. It's smoking fast compared to what you have now:
BFG Tech BFGR6600GTOC Geforce 6600GT 128MB 128-bit GDDR3 AGP 4X/8X Video Card - Retail
I don't think you have a SATA controller on that motherboard so you're stuck using the ATA100/133. Get this:
SAMSUNG SpinPoint P Series SP1203N 120GB 7200 RPM 2MB Cache IDE Ultra ATA133 Hard Drive - OEM
You need to upgrade the RAM to at least 1GB (use your old RAM for spare-don't mix RAMs):
OCZ Gold Series 1GB (2 x 512MB) 184-Pin DDR SDRAM Unbuffered DDR 400 (PC 3200) Dual Channel Kit System Memory - Retail
You can also upgrade the sound card and motherboard, but now you're talking about major overhaul, lol.