Your RAM really isn't that bad, but the new boards use a DDR2 800 standard. It would be tough to find DDR 400 on a 'new' board.
2GB (1GB x 2) = $50
Intel makes pretty good processors right now, and you might be better off changing from AMD to Intel all together. Intel's coming up stuff looks decent as well. With plenty of good motherboards to choose from, this selection will only be hard because there are *too many* choices.
New Motherboard: $100
Intel's better performance comes at a price. Their processors are more expensive than that of AMD's. I still recommend this path, but it just means you'll have to choose your processor carefully. If you want to budget, you can get the $90 E2180, which comes stock at 2ghz, but can be easily overclocked to well past 3ghz. It's also dual core.
New Processor: $90-200
Total: $240 - $350