Considering that no mention of game playing was made upgrading to a independent graphics card is not warranted and places ever greater demands on the notorious low performance PSU's placed in Dell systems.

Its worth remembering that Windows XP will actually run in 64 mb and runs in an acceptable manner although slow with 256mb of memory and as such having 500mb of free memory is acceptable for the intended use although 2gigs of memory would offer a nicer user experience, as would 3gb but you have to draw the line and somewhere and this usually effected by the available budget.

A user with small business needs and a bit of web browsing and music has no needs for a after market graphic card simply as they will not be doing heavy graphic intensive tasks thus the demands will never be placed on the graphics card

The X3000 chipset used in the Intel onboard graphics feature Dynamic Video Memory and as such varies the amount of system memory used depending upon the demands placed upon it, it can run in 8mb of memory at times which has minimal system impact while using memory running at 667MHz does have its advantages

Having said that I am a hypocrite as I run 16gb of memory on my system