Well, I'm pretty sure you will have to replace everything, including the HDD and CD/DVD burner and OS. Here's why:
The Windows XP is (probably) what came pre-installed on your Dell. It is not transferable to another computer, particularly one that came from another manufacturer. That complicates things and raises the price. The plus side is that you can get new XP from www.buycheapsoftware.com, including XP-64, and it's a legit site. I'm willing to test TS2010 on my XP-64 machine for you, if you are willing to hold off a little. Windows 7/Vista is a lot more demanding on resources, and, since you're looking only to buy 4Gb of memory, I think you will pay dearly in performance, as the minima for those OS' are so high even with lots of memory. (1 Gb for w7 32-bit, 2 Gb minimum for w7 64-bit.)
Then there's an unofficial rule that your need several times the amount of the manufacturer-stated minimum to get a decent machine. In my experience, MS operating systems suffer from an informal rule which I call the 1-2-4-8 rule. At 1x the minimum required memory, the computer will barely run. It'll run like a slug, multitasking will be difficult if not impossible, and you can expect frequent crashes. At 2x the minimum required memory, it'll still run like a slug, but you may be able to play DVDs (or, on a modern computer, hi-def downloaded files...but possibly not Blu-Ray). 4x the minimum memory is what you need to have a decent, ok, stable system. And, at 8x the minimum requirement, you should have a smooth-running system.
It's possible this rule might not be as hard-and-fast as it has historically been for Microsoft OS' but it seems to generally apply.
Unfortunately, I think you are going to be priced out of the i5, but you can still make do with an i3. And, frankly, it's not a bad system.
One aside: If you like your current system as it is (aside from Trainz and other games) then it will make a good internet machine, as mentioned before. If it runs like a slug (which partially happens from having lots of applications installed, and, especially, removing, reinstalling, updating, yadda yadda yadda) then you might be able to reformat your current Dell with your reinstallation disks (after backing up all your valuable data, obviously.) You can get decent performance out of a clean install, though nowhere what you'd really need to run Trainz.
The Windows XP is (probably) what came pre-installed on your Dell. It is not transferable to another computer, particularly one that came from another manufacturer. That complicates things and raises the price. The plus side is that you can get new XP from www.buycheapsoftware.com, including XP-64, and it's a legit site. I'm willing to test TS2010 on my XP-64 machine for you, if you are willing to hold off a little. Windows 7/Vista is a lot more demanding on resources, and, since you're looking only to buy 4Gb of memory, I think you will pay dearly in performance, as the minima for those OS' are so high even with lots of memory. (1 Gb for w7 32-bit, 2 Gb minimum for w7 64-bit.)
Then there's an unofficial rule that your need several times the amount of the manufacturer-stated minimum to get a decent machine. In my experience, MS operating systems suffer from an informal rule which I call the 1-2-4-8 rule. At 1x the minimum required memory, the computer will barely run. It'll run like a slug, multitasking will be difficult if not impossible, and you can expect frequent crashes. At 2x the minimum required memory, it'll still run like a slug, but you may be able to play DVDs (or, on a modern computer, hi-def downloaded files...but possibly not Blu-Ray). 4x the minimum memory is what you need to have a decent, ok, stable system. And, at 8x the minimum requirement, you should have a smooth-running system.
It's possible this rule might not be as hard-and-fast as it has historically been for Microsoft OS' but it seems to generally apply.
Unfortunately, I think you are going to be priced out of the i5, but you can still make do with an i3. And, frankly, it's not a bad system.
One aside: If you like your current system as it is (aside from Trainz and other games) then it will make a good internet machine, as mentioned before. If it runs like a slug (which partially happens from having lots of applications installed, and, especially, removing, reinstalling, updating, yadda yadda yadda) then you might be able to reformat your current Dell with your reinstallation disks (after backing up all your valuable data, obviously.) You can get decent performance out of a clean install, though nowhere what you'd really need to run Trainz.