OK, here's my advice for that machine.
1. Buy some more RAM. Head over to
www.crucial.com and sue their memory advisor tool to find out what you need, then shop around. If you're not sure what to do at this stage, ask more questions, it's the best way to learn. Get at least 512Mb of RAM at the highest speed your board supports if it is cost effective. More RAM is probably the main thing that will help speed up your PC.
2. Perhaps buy a newer/faster hard drive, one with as much space as you will need. This will speed up many things.
3. Maybe upgrade the CPU, however I think eBay is the only place you could go and I know many people are wary of buying components from there.
4. Back up all data you want to keep onto an external drive, CD, or something like that. This should include music, letters, videos, and anything else that you want to keep.
5. Reformat and perform a fresh install of Windows XP.
Basically, with a few upgrades and some maintenance procedures, that PC could happily chug along for a while yet, as long as it's not used for anything too taxing.