I may be a little partial to durons, but I'll say...get the duron! Yeah unlock it lower mult if you have to and up FSB to 133, if not higher. the morgan core has SSE and should perform almost as good as the Tbird....i looked on pricewatch and the 1.2 Tbird is 84 bucks and the 1.4 is 82....So your question comes down to:
What FSB can my memory handle? If it isn't much over 150 with fastest timings, then both the duron and 1.4 Tbird will hit that.
How much money do I have? 32 bucks may not seem like a lot, but there's very little performance increase, also you really need to go DDR to see major increases, your only as fast as your slowest component.......
Can I wait for Tbred? you said you needed a new chip....if you need one now obviously it's a no...otherwise I'd look into waiting for Tbred. I'm waiting for reviews on it to see what FSB speeds Tbred can get, then I might upgrade.
I'd say buy the duron and save up for a DDR platform. Your not gonna notice a huge difference in performance until you get outa the SDR arena. XP's are nice, however, DDR is nicer. I'm a huge fan of durons and DDR, in real world performance I can't tell a difference between my 1 gig morgan (158*9) and the XP1700@1826 that I had. (granted I now have 512 ram with the morgan and only 256 with the XP...may make a tad of a differance).