General Stuff: I assume your system works good for non-gaming? Otherwise, your system seems about right for most normal applications. Gaming adds its own significant processing requirements.
If you really want serious gaming capabilities, you should upgrade your RAM and your video card, but then your processing speed is slower than most current gaming systems, so you will lag in that department.
Is it worthwhile to continue upgrading vs a new system? Your call. One thing is certain, game developers will still demand the latest, biggest, fastest or whatever to be competitive.
The money you have to spend is more than enough to find a good median-priced video processor, but not enough for the very high end. Google for your PC and model and you'll find dozens of possibilities.
Specific WoW: These are the specific requirements for Warcraft -
Recommended Requirements:
Intel Pentium IV 1.5 GHz or AMD XP 1500+
512 MB RAM
64 MB 3D graphicscard with Vertex and Pixel Shader capabilitiy, such as an NVIDIA Geforce FX5700 class card or above
Broadband Internet connection
Two-button scroll-wheel mouse
For a complete list of supported 3D cards:
http://www.blizzard.com/support/wowYour video card does not seem to provide pixelshaders support for this game, which may account for some of your problems. See here for more info:
http://nvidia.custhelp.com/cgi-bin/nvidia.cfg/php/enduser/std_adp.php?p_faqid=14&p_created=1096408407&p_sid=wOxjbKrh&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9MyZwX3NlYXJjaF90eXBlPXNlYXJjaF9mbmwmcF9wcm9kX2x2bDE9JnBfY2F0X2x2bDE9JnBfcGFnZT0xJnBfc2VhcmNoX3RleHQ9Z2Vmb3JjZTI*&p_liHope this helps!
Dell