Upgrade or Replace?

I have A Sony VAIO PCV RX540 I got from a friend for free! It has a 1.2 Ghz Intel Celeron processor with 512 mb ram, 64 mb DVI TV tuner card, Really slow DVD burner, and a CD RW drive. There is a 20 gb hard drive with Windows XP home SP2 on it. It was made in 2001. Is this a good computer where all I have to do is upgrade the DVD burner , Hard Drive and reinstall the operating system? Or should I ditch this one and get a new one. All I want to use this computer for is basic Internet browsing, word processing and light gaming (older less good video games). Please help!