I am by no means a techie, but I understand from friends who are in the business that it is very nearly as cheap to buy a new system as it is to upgrade. UK entry level seems to be around £550 for about 600Mb, and for £1000 you can get practically 1Gb, and a year's warranty.
My machine is 2 years old, and I reckon that it will last about the same again. Then it's off to the spare room so that my wife can play Mah-Jongg and Freecell without chucking me off the Net first.
I have almost decided that the next one will be a laptop, not because I travel that much, but because it is so much neater than a desktop.