Since the alternative was to wash dishes
I made a sample kit to look at:
http://secure.newegg.com/app/WishR.asp?ID=1432715
[*]Antec Sonata case with quiet, good-quality 380W PSU
[*]Abit NF8 motherboard
[*]Athlon64 3000+, Socket754
[*]2 x 512MB Corsair ValueSelect PC3200 memory modules
[*]MSI Geforce 6600GT AGP video card
[*]120GB Seagate 7200.7 hard drive, standard Parallel ATA interface, 8MB cache
[*]BenQ dual-layer DVD burner with Nero 6 OEM software, black to match case
[*]Mitsumi floppy drive with built-in 7-way memory-card reader, black
[*]Microsoft Works Suite 2005 OEM, all-around useful stuff:
link to what you get for your $46
[*]WindowsXP Professional Edition CD and license, more money than Home Edition but more capable and with a much longer patch-support life
With that rig, you could run
DBAN on your old Compaq to thoroughly erase traces of your personal data, then run a Restore, patch it up nice, and sell it or give it to charity.
This system would play HalfLife2 and other current games pretty well for what it costs.
If you need a recommended antivirus/firewall setup to go with the new rig, I would suggest a $40 Netgear RP614 router as your perimeter firewall, Kaspersky Antivirus Personal 5 for antivirus, and either the Windows Firewall or free ZoneAlarm basic as the software firewall. I can give some detailed suggestions for the router's configuration since I'm familiar with that model, ditto for the software.
Hope that was some help