Sony PCG-FX105K

Okay, so this was my relatives old computer from about 2001, and it eventually got passed down to me. 

Recently, I decided to launch it up and it gave me the blue screen of death, like always. :/ So, heck, last night I decided to install a fresh copy of Windows XP SP2 Pro and went to town with this computer. I installed Sims 1 on there and decided, okay tomorrow I'll have a play with this thing, like the old times.

Go on it this morning to boot it up, OPERATING SYSTEM NOT FOUND.........

I was like, "Are you freaking kidding me?" Like, never ever in one night has this computer decided to just completely wipe out an OS  

Its specs are 128MB RAM (:/), 18-20GB HDD. More, like Video card etc, here: http://www.computer-specifications.com/specifications/Sony-VAIOPCGFX105K-Specs.html

So I was thinking, hey if I add some more RAM and eventually replace the hard drive, maybe it'll renovate itself and be 100% functional again? Obviously, that's some genius idea that will probably never happen but I just wanted to hear other opinions? 
Is it worth the time and effort to replace the HDD and upgrade RAM, or should I just get a new windows computer instead?  

My approach is...there are some persons that NEED a new computer every whatever...while I find that a working computer is a hard thing for me to get rid of.  Consequently, I have 3 working desktops and 1 working laptop for a single person living alone in an apartment complex .

Buy a new one if you have the money and can afford such whims...but, in my world, a working computer is not necessarily something to be tossed aside just because I want a newer system.

OTOH...any system that predates the Era Of Multiple Processors...really has outlived its time in terms of availability of replacement parts or easy repair.  The concept "backup system" comes to my mind, rather than "primary system."

Louis