I'd upgrade, but more RAM could help
When a computer's 5 years old, it's probably time to upgrade, but if you're looking for quick cheap help, you could add another 1 GB of RAM. Since you have a 32 bit system, you can't use much more than 1 GB. RAM is very cheap these days, I just bought 8 GB for my laptop for $40. Another thing to check would be startup programs. Hold down the Windows key and press R, then type in MSCONFIG and hit enter. Click the Startup tab. Here you can uncheck everything but your antivirus program. These things can often slow a computer needlessly.
One other thing you need to carefully consider is that the time to get a PC with Windows 7 is rapidly coming to a close, and a lot of us really don't like Windows 8. So if you're thinking about getting a new PC, you should give careful consideration to that.