If you upgrade the RAM, you will have to be sure what speed of RAM your motherboard is capable of running. For example jay8990, PC3200 (DDR400) might not work on rdcmmnst's motherboard, so try and get another 256mb stick (to make 512mb) of the same brand and speed as the one you have.
This would speed up the loading of programs and will allow you to multitask more, effectively speeding up your PC for the longterm.
The next upgrade which would speed up games (I expect this is the problem you are having with speed) is to upgrade the graphics card which is always an effective option, and usually one of the better ones if you play alot.
A good Geforce 6600GT costing about £160, if you have an AGP slot on your motherboard will speed games out now at high resolutions and settings.
So these are two options. Those are the only things you could update reletivley cheaply.
That CPU speed is fine for the latest stuff (2.8ghz) and so not a problem. This means your motherboard must be okay, so I'm sure you do have a AGP port to buy that video card.
As for the RAM, download Everest:
When it searches the RAM, take note of the speed, and the brand of RAM you have in your system so you can buy an identical stick of 256mb RAM. (512mb will be good enough)
I hope this helps