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I think that you should first figure out what is wrong with the PC.
Shouldn't cost much. I'd suggest that a technical person would be able to get a fair idea of the problem within 15mins.
Sure - buy a new computer if you need it. Apart from games, I'm not sure if there's much that came out in the last few years that needs new hardware.
And perhaps if you are looking to upgrade, wait until M$ release the list of (hardware) requirements for Windows Vista. After all, it's been late for a few years now. They'll have to ship it eventually.
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