OK, as said you have paid over the odds for it, but I would buy these two items, possibly 3 items and you should be ok for gaming Sell the old items on ebay.

2GB of 800mhz ddr2 ram, around £20
Ati radeon 4830 graphic card, around £90
Intel e7300 CPU around £90 * try your old CPU first as it may be ok and there is also a possibilty you can overclock it.