At the risk of starting a flamewar...

Install Linux on it. Seriously. Many Linux distributions have much lower requirements than Windows, and run just fine on old hardware. Especially if you use less demanding window manager like Xfce. It's not going to help for games because their requirements don't change, but for common tasks like browsing www, mail, word processors, playing music etc Linux will let you squeeze more out of aging hardware.

For a start I'd recommend burning an image of latest stable Ubuntu.

http://www.ubuntu.com/

You don't even have to install it, thanks to livecd. You can just insert the disk and boot into RAM, it won't even touch your HDD unless you tell it to. You can try it out (using some software, use the web...) before you commit yourself to any decision.

And if you want to squeeze the absolute max out of old hardware, there are distributions like DSL (Damn Small Linux; the image is 50 MB and fits even on small USB drives !).

http://www.damnsmalllinux.org/

Booting from USB is very convenient for many tasks, and it scares Microsoft. And if something scares Microsoft, it's good for the public.

http://blog.linuxtoday.com/blog/2009/03/if-it-scares-mi.html

When looking into computer upgrades I think the first thing to consider is: Can your motherboard support a modern processor?

When I considered upgrading mine I found the answer was an unfortunate NO. Basically my MoBo doesn't have the right pin formation to handle a modern processor. Of course, my PC is AMD... and my MoBo is a 939 socket... So, upgrading my computer is not going to happe.

I also recommend checking: www.cyberpowerpc.com to compare prices between something new versus what you'd spend to upgrade.

save some money and build one !!!!!!

Most Dimensions have only two memory slots and the case is terrible.  Not designed to use a non-Dell motherboard.  In addition they have a very small PSU.

Donate it and start over.

@Frogboy,

1.  Forget upgrading the rest of the hardware and instead purchase a cheap RAID card from www.highpoint-tech.com (ie. RocketRAID 1640)

2.  Purchase 4 1TB SATA hard drives

3.  Install the RAID card and the four 1TB drives.

4.  Configure the RAID array.  I would suggest going with a RAID 5 array since it'll leave you with 3TB of total storage (RAID 5 takes a hit on WRITE performance as compared to other RAID-levels however the READ performance is decent)

5.   Download and install FREENAS to turn that system into a cheap network accessible storage solution.  FREENAS can be run from a CD and you only need a floppy in the drive to save the FREENAS config options.  The quickest NAS setup I've ever encountered!

You now have a 3TB network accessible storage solution in your basement for around 20mins of work!

the Monk

As well versed or far more to replace a vid card and drivers. Not exactly rocket science.

Luna.. wokred great..  Loaded WB, windows lagged badly , had problems with translucency. Ran hot.

Tried on 2 pc's.   Gone.

Kinda of saddening seeing that was the main 'prize' i won.. but oh well.. you roll with the punches in life.

I've heard similar strories about ATI cards before, pretty sure it wasn't anything i was or was not doing and I certainly won't be buying another. Nvidia ftw.

I totally agree, I install openSuse (I know), it gave me more abilities than Vista (even had Aero), gave me server abilities without the memory hog, 3 gb gives you server for different server platforms, lots of development, but the bunmmer thing of Linux is that if you want to install something new it is hell.

BTW, you could also get VMWare which is free, and then install any version of Windows (at the end you probably get a file which is the Windows operating system, so you ask how big, well I got Windows 7 as vmware, it was 5 gb, 7 at most), and install games as usual, but it still needs the same req as Windows games though...

I suppose it was packed with the amazing stock-cooler. It's the worst piece of crap ever, and unless you have like a jet turbine venting your case it won't do any good. The first thing to do with any ATI card is get rid of the stock cooler and get something that actually does the job properly.

I REALLY wish there was a decent alternative manufacturer... Both ATI and Nvidia currently produce overclocked crap that runs waaaay too hot.

Never had any issues with Nvidia really.. both have crap control ui's tho.

Can I upgrade my Atari?

lol

I had an old eMachine with a 2.0Ghz single core, AGP slot, etc.--very basic computer.  But, I slapped in a $100 (or less maybe) GeForce 7600GS, discovered PC gaming for the first time, fell in love, and swore off consoles forever!  Peeps complain about the cost of PC Gaming, but that setup (with some extra RAM too) ran Call of Duty 2 on high alongside the 360 at launch--not a bad feat!  And like I said, it got me into PC gaming for life, so it was definitely worth it. 

I have since bought a newer, more modern laptop that I use for gaming, and let the kiddies use the old eMachine.  Of course, it now sounds like a jet engine and barely holds together with all of the scotch tape, popsickle sticks, and glue I hold it together with.  But it still works (most of the time).

Gee, that reminds me... i DO still have the 386DX40 in a card box somewhere, the cmos battery must be long dead and the 125MBs hard-drive would squeek a little once awaken from the dark. I'd have to re-learn how to properly use Windows 3.1 though.

Hey, even more interesting... i DO own a full-blown TI/99-4a, 16K of Ram, 256 colors, Yamaha 9960 GPU, highest resolution in the world at that time, modules and all.

Heck, why not... might as well dig for the Turbo-GraphX-16, plug the RF to the tube, snap a card and play any of the 40+ games like Nectaris, Galaga, Raiden, SideArms, etc.

Naaa, i'll stick with emulators.

My objective here really is to make the game able to play Demigod so that my sons can play with me online. So turning it into a storage unit wouldn't work out there unfortunately. 

New mobo, minimum. Why i suggested a tower.