With your PC (hardware) is 6 years old and to achieve the performance you're asking for....you might be better off buying or building a new PC. IMO, your biggest downfall or bottle neck of your upgrade is your OS, being 32 bit, which dramatically hinders your RAM upgrade. The next issue is your CPU...dual core and 1.8ghz...so there goes your budget with just those 2 replacements. Then a decent GPU will run you around $150.....not sure what you mean by complex games. If you mean graphic intensive games...now your talking about a GPU in that $300 - $600 range.
I'm having a hard time trying to find a replacement CPU (new) for your 775 socket intel mobo. I see ebay has a bunch of used ones.....
The only thing I see upgrading for your...