Since I do a lot of video and audio conversions, these are the programs that suck up most of the memory and trying to do something in the background is when the system slows down.
If you are running a 64-Bit OS, then you can certainly take advantage of more than 4Gb of RAM. And A/V converting is one area you might see a significant improvement. That said, unless that is your job, A/V conversions are usually a one-time event - once it's done, then you just listen and watch and it takes little RAM, CPU, or even graphics horsepower to watch videos or listen to tunes.
Since you have 4Gb now, I think the best way to spend your money is for a good graphics card. The more capable the card, the more the CPU can hand off to the card. And it takes little to nothing for a CPU to hand off tasks.
That said, eMachines are the budget line of Gateway/Acer computers. They are not really designed to accommodate upgrading - in fact, they are almost considered disposable computers (except for the impact on the environment). If me, I would save my pennies and instead, start looking at a good case to assemble a new computer in. You are already talking about buying more RAM, a graphics card, a sound card, and a new PSU. And I should point out - ohh... wait a minute...
According to the
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I was going to say, if you bought more RAM for this machine you would be spending money on obsolete technology as DDR3 is here to stay while DDR2 is on the way out. One nice thing about building your own is you don't have to buy all the components at once. You can split it up over a few paydays. I do recommend buying the motherboard, RAM, and CPU together, so that typically is the biggest expense, then the graphics card. Unless of course if you are serious about graphics conversions, then the card (or cards) would consume the budget -
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And for the record, many newer high-end motherboards are designed to be integrated into home theater systems and therefore support very high quality on-board digital audio. You probably would not need to buy a separate sound card - and I say that as someone who's first love, before computers (and that started in 1975) was audio reproduction and audiophile electronics. The speakers are the limiting factor, not the electronics.