Now is a pretty decent time to buy new. Prices aren't very high. You're in for a new chip (minimum , I wouldn't be surprised if you need a new motherboard as well) anyway, so you may as well do your full upgrade now and get it out of the way. Especially since, if you only get a chip now, and then go upgrade later, you'll be buying a new chip anyway.
The 506 is the top of the line standard (non-hyperthreading) P4 chip.
Your motherboard uses
http://www.crucial.com/store/partspe...E=BL6464AA1005
DDR2 ram. As you can see, it's rather expensive.
Nvidia is generally considered to be on top of the graphics card game right now. Wait a few minutes and it'll be ATI again. those two switch off quite often.
Keep in mind you'll still need a new power supply, and you'll probably need better cooling than you had in your old one.
why such a low price point? If you went up by just 300 bucks or so you could build yourself a real screamer that would last you way more than 3 years assuming you don't want the latest & greatest games.