Well, you can upgrade components on it, the question is "Should you upgrade it?" Another question: Why do you want to upgrade it?
It is a bit too old for any sort of heavy gaming, but more than likely good enough for about everything else. How much memory do you have? Bumping memory to 4 gig can often make a machine quicker
The problem you run into is that certain items like memory are a dead end, as DDR2 cannot be carried forward to a new build. I had two customers in similar circumstances running XP. Both their machines ran 512meg for years and finally got bogged down with everyday tasks. Both machines got 2gig upgrades and are actually enjoyable to use now. Both customers wanted to keep their machines and don't plan on any near term upgrades to new units.
Time to realize though that your system is going on 4 generations old as far as the CPU goes. Those old Core CPUs were great, but now even stuff like videos and internet browsing with all the background stuff running can slog it down. It is not unusual to see older systems hitting 60-70% CPU utilization just browsing sometimes.
Things like SSDs and video cards can be carried over to new builds, which in my book, makes them less of a dead end. That being said, insufficient memory is the #1 problem i run into on older machines. Vista was the worst as some of those machines in the early days came with 1gig of memory when 2 gigs was barely enough to get the job done.
I am a retired Ford tech. Next to Fords, any computer is a piece of cake. (The cake, its not a lie)
3770K @4.5, Corsair H100, GTX780, 16gig Samsung, Obsidian 700 (yes there is a 700)