You are in a bit of a dilemma. Your machine is about at it's limit for a better cpu. Ram for this machine is quite expensive and you would not be able to move it on to a newer machine. A faster and larger hard drive would help a little and that could always be used again.
I don't think it's worth putting anymore money into the machine, you will be playing catch up and will always loose.
Firstly backup your data and try a re-install of the operating system. That always boosts performance.
If you want to upgrade I would suggest a package like this click here which would be at the top of your budget. You could use your current harddrive and cd/dvd writer although you may have to reinstall or repair windows to get it going. This would give a massive boost and you will have plenty of scope for expansion in the future.
less expensive would be click here or if you can pewrform a simple task of taking the motherboard out, one of these click here. You could couple the last one with a 400Gb hard drive for around £145 click here