You could add more ram though i run my PC with 1GB and its fine. I think the biggest improvement you could make is to put a new graphics card in as its using Integrated Intel Graphics Media Accelerator 950 (GMA950).
The problem is most new vid cards require power from the psu and your supply is only rated at 305W. This may be up to the job but i don't think it will cut it to be honest. You would probably be better off replacing the psu at the same time , its easy to do only 4 screws. If you decide to go for a new psu do not buy the cheapest you can find they are unreliable go for a name brand like Antec. I have just put one of these in my PC it had separate rails for the motherboard and CPU and a great reputation. http://www.ebuyer.com/UK/product/90615
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