Hmm 150 quid abouts will get you a decent Nvidia Geforce 6600GT, unless its in dollars of course.
The 6600GT is the lowest i'd go now for a new card. I wouldn't drop any lower since those wouldn't give the right type of performance in new games worth paying for.
Upgrading the RAM would be okay, but after 1gig, you don't really notice much difference in speed unless you run many, and I mean, many programs at once.
I'd personally got for a better video card. That will give you better performance for games than getting new ram would (that would get you hardly any difference). Any card will be better than the 5200 you get now. That has had its day