You know your system is outdated when you can't run any games in high settings at medium resolution (assuming you have a decent video card), or when your PC cannot run the application that you want (Suppose Adobe Photoshop v.12) without considerable slowdown.
The other scenario is, if you're extreme enough that you want to play every latest game at 1600*1200 resolution on max settings smoothly and you can't anymore, in which case you'll have to upgrade probably every 1.5-2 years.
So depending on *your needs*, your system might not get outdated for a long time.