To be honest with you, if you were one of my clients asking the same thing, I would tell you its not worth putting money into to upgrade it.
You can upgrade the memory (at least 4GB for a 64bit OS, more is better and if youre thinking of TANE, at least 8GB). You would most likely need to upgrade your power supply if you're looking at a more powerful graphics card, etc. etc. But at the end of the day, you're still stuck with a Dual Core Processor at only 2.20GHz trying to do all the work, and that is going to be the biggest bottle neck because it cant do it fast enough (along with your motherboard speed). Depending on your case, you may find it cant handle the air flow required to cool it down correctly. And so it goes on. You know, there are so many issues here that pouring money into it may not be give you the results you would be hoping for, for the cost you are putting into it.
I think investing in a mid-range Quad Core Processor (Intel i5 or something) and putting a good graphics card in it would be a better investment.