With this budget, I would assume you are not using the machine for gaming.
My suggestion is:
AMD Athlon 64 X2 4000+ (2.1GHz) Socket AM2 Energy Efficient L2 1MB (2x512KB) Cache Retail Boxed Processor £41
MSI K9AGM2-FIH Socket AM2 690G and SB600 Chipset 8 channel audio HDMI onboard VGA mATX £44
Corsair 2GB Kit (2x1GB) DDR2 675MHz/PC2-5400 XMS Memory Non-ECC Unbuffered CL4(4-4-4-12) Heat Spreader Lifetime Warranty £57
Total: £142 from ebuyer