If you have 256 ram now, a 512 module will cost you $50 and bring you up to 768. This is a good number to work with. That will leave you with $50 - save it till you get another $50 and then consider a PSU and video card. Here's a decent PSU that can handle any reasonably priced AGP card you can throw at it:
http://www.newegg.com/Product/Produc...82E16817153023