My current rig is;
athlon xp 2500 - Asus A78N delux - 2gb ram - All in Wonder Radeon 9800 - Klipsch 5.1. its been around for quite a while, and still working great except for laggy video and skippy music when multitasking. When I say I get my moneys worth... well you get the idea.
Anyways since my dads computer just died (not worth fixing) I figured I would just give him this one and build another. My goal is to spend the least $ and still be able to multi-task and not have laggy music. and watch the latest video.
since I have a second 500gb iede can I reuse it?

I don't need DVD-burner, keyboard, mouse, speakers, monitors(yet), I kind of prefer AMD but not that important. and I don't much care for overclocking unless its really easy and worth it!
I guess some of the questions I have are, do I need quad core processing or will dual core fit the bill for what I'm doing? Is DDR3 that much better then DDR2? and where I really need help is matching the best Mobo to the processor. I'm hoping since this isn't the latest greatest build some of you should have the bugs already worked out?
here is my current rig

Thanks for your help!