I just got a Celeron (2.9 Ghz, 256 ram, 80 gb hard drive) for like $150 with a 17" flat CRT from black friday sales.
I actually upgraded the integrated graphics to a GeForce MX4000 128MB PCI Card just to free up the processor. I see a difference in that alone and I'm not doing any gaming just to let ya know.
However, I am going to upgrade the 256MB RAM to 1.25 GB. That should definitely make it run much faster when it comes to DVD Burning and stuff.
I would say just get a PCI card and upgrade the memory man.