As im sure you are aware, Conan requires quite an up to date and well specced machine to run at decent settings. I am running the game with the following spec, and it works smoothly enough (and looks pretty good to boot):
Intel Dual Core E6600
XP Home Edition
NVIDIA 8800 GTX Graphics.
In terms of your system, you definately will need to boost the ram to 2gb for the game to run at all smoothly, and I would suggest going for at least an 8800GT card with 512mb onboard too. I cant honestly say if your processor will need a boost, but the recommended specs for the game suggest at least a dual core. If you need to boost the processor then that will likely need another motherboard also.
Looking at it you might be better off going for a new build, one with the specs similar to the above should be acheivable for around £600-£700 or so if you shop around. That way you would be likely to get Vista home also. Conan doesnt yet support DX10, but it is in the pipeline and you will need Vista then if you want to run it at that level anyway. If you do go for Vista I have heard people saying in game that 3Gb ram is better to keep things as smooth as they are with XP and 2GB though.
Its a good game, certainly it has promise. Personally I wouldnt go and get a new PC or spend £100's for this alone, but as time goes by game requirements are rising and at some point its going to be necessary anyhow. Might just be time to bite the bullet.