Honestly BlueJacket.. neither one of the suggested ' upgrades ' will be a huge imiprovement. You may not even notice it. Because the architecture is just not up to par with today's standards. Upgrading to even an i5 would be a vast improvement to your current system. You may just want to hold off and save up and build yourself an i5 or an AMD system.
If I were to build an i5 or AMD, would I still keep my case, ram, hard drive and CD drive and change everything else?
It depends on the case, but I will make the assumption that the case will take an ATX type of motherboard, then yes, you can re-use the case.
However, depending on what motherboard you get, you *may* be able to keep the hard drive and the CD drive because more than likely, both drives are IDE type, not the newer SATA drives. Saving the RAM is out of the question, period.
Depending on your budget, I might be able to work up something that would give you a good idea of a good computer build based on your budget.
I would definately refrain from buying a computer from a store.
Most computers found in stores are built with inferior computer components and you will not get your money's worth.