I doubt the additional ram or upgraded O/S would help without a full overhaul to ...
probably a new mother board and quad core chip. Dual core will not handle newer games. Then you would need minimum 6 ram and upgrade to windows 7. Your graphics card may or may not pass muster. I would guess you will need an upgrade.
This is all assuming you still want a gaming rig. If you just want a spare PC to surf the web and play the old games that performed well with the dual core I would restore it to factory condition. Upgrade your ram and upgrade to Win7 O/S
I would guess 400-500 minimum for low-mid stuff not counting a graphics card. It could be a lot more if you get hooked on fixing it
