I'd just start afresh to be honest, keep the soundcard and other bits like the speakers etc because they can be used again, my first soundcard was a 6 year old Sound Blaster and it worked fine. You can build a very cheap PC for less than $500 that will outperform yours easily.
well, hard to say, you could add more ram, but it'd be a waste. A good budget $500 will do decent in all fields of computing. It'd be a waste to upgrade your current system.