Depends on what you wanna use it for and what problems you're having now with performance.
If you like to play games and plan to purchase new games in the future, I'd just buy a whole new system. Your processor barely meets the minimum requirements of most new 3D games, and that video card probably won't allow you much detail either.
If you just want the computer for productivity and internet, but are short on hard drive space, a hard drive upgrade wouldn't be a bad idea (either changing out the current one or adding a second drive to hold music, movies, etc.). The rest of the system is good enough for that.
If you do decide to keep the current system and upgrade the hard drive, upgrade the memory as well, at least to 512MB if you're running XP, but I suggest going for 1GB.
