I would say that upgrading that old inspiron computer is not going to be worth it. Your best bet is to format it to stock condition, and sell it on craigslist for a couple hundred bucks or whatever.
Check techbargains and slickdeals.net
I scored a dell optiplex desktop with a 24 inch monitor for $480 including tax and shipping. This came with a dual core intel processor, and windows 7.
I got that computer, and spent about $80 on "upgrades" and now am very happy with it.
It came with 2gb ram, I had to throw the 2 1gb sticks out, and I upgraded to 4gb of ram (2x2).
It came with a SATA DVDROM/CDRW combo drive, I put a SATA DVD Burner in it.
Also It came with a 320gb hard drive, I had an extra 500gb unit laying around so I put that in it also.
Finally, I put a 30 dollar ASUS HDMI video card in it (upgraded the integrated video).
For about $560 it is pretty rocking setup. I could not even come CLOSE to building this thing for that money.. Forget even buying a windows 7 license.
My only gripe about the optiplex is that it has the Intel Dual Core CPU, not the Core2Duo. Its not an issue at all for me.
If you try to upgrade that Inspiron, you will probably have issues with the power supply. I bet it has a 225 or 250 watt PSU in it. Read the data sheets on the CPU you want to use, I bet they want more than that. A halfway decent antec power supply is $45 at office max, I think they are 400 watts.
Not to mention even getting a new motherboard in that inspiron case. Is that one of the slim towers, or the short towers? If you open it up, I bet that dell is using a non standard motherboard in there. You might have problems getting a motherboard to mount in that case, then you might have problems with the IO plate on the back of the computer. Also does that dell use a heatpipe setup for cooling? You may or may not be able to adapt that as well.
I've tried to do this before, with an HP desktop. I ended up swapping in an aftermarket motherboard for a friend that insisted that he wanted to upgrade over buying new. I completed the job, but we had to drill holes in the backplate to even get the thing to mount. Then we had to actually cut the old IO plate out of the case (I think it was welded into the case). Then of course, I had to grind the cuts smooth, and I actually had to JB weld the new IO plate into the case.
Then I had to do something custom to get the front power buttons to work, and the lights. I think there was something weird about the USB headers as well.
Its a pain in the rear, trust me.
