You look like you already have a game plan for your current system, which is a good thing.
512mb is weak for todays gaming. I would say 1gb or more. Of course I always recommend http://www.digi4me.com I love their products and have never had an issue with their ram. Their prices tend to be cheap to mid range but you can be assured you will not get el-cheap-o ram.
As far as the video, I'm not an ATI guy so I can't really recommend anything in that field, since you have an AGP slot, I would recommend getting something on par with an Nvidia 79X0 card.
The CPU should be the easiest part to upgrade in terms of selection, I assume it's a 754??? that socket has reached EOL status and they dont make current CPU's for that system. I would say buy the fastest/cheapest 754 CPU you can find, The turion is a good choice because of it's low wattage requirement and low heat output. The 754 turion tops out at 2.4ghz and 1mb cache I believe. If you have a 939 or other socket, then you have a much broader selection to choose from.
I'd say this last upgrade should hold you over for quite some time until you put the money together for a new system.
Sweet! there's an edit button!
As far as the PSU, naa.. leave it. If you figure, Turion, 35W, high end video card a max of 100w, thats only 135w taken so far, fan each only pull a watt if that and HD's also only pull a few watts, chipset, etc.
I love this edit button! 1gb will not be enough for games like STALKER, stalker it self eats up 1.25gb's alone. 1gb will be more than enough for games like Bioshock(consumes roughly 600mbs) and BF2(consumes about 750mb to 1gb). HL2 is fine with 512mb. HL2 is really nothing more than the HL engine with DX9 features and HL2 will run on a system with 256mb's or more.