Get yourself at least 256MB of either DDR or SDRAM, 512MB would be best. Stick with the two hard drives you have. ATA/100 hasn't even broken the ATA/66 speed barrier yet. Get Cable or ADSL and get rid of that PCI WinModem/dialup. DVD and CDRW are good, CDRW may be a little slow but it does the job. Sound, SB Live!, well I'm mixed here. I would say keep it, but I really like my SB Live! 5.1 and if you like games that can produce DTS then you're gonna want a 5.1 card and a set of speakers like the Cambridge SoundWorks DTT2500 or Midiland 7100 5.1 Plus.
Processor and motherboard... that is a big debate there. I suggest a AMD motherboard and processor so you can keep cost down and save your money for that GF3 you want to buy and upgrade the sound card/speakers.
PM me if you want to discuss more. I've built several systems in the last year and have helped quite a few people spec and build them themselves.