Worth upgrading its amazing has you say as Win xp increases in code (extra updates and what not) along with applications being updated and new versions how what seemed whizzy 5 years ago is now struggling.

For me a new HDD can make a big difference expecially if a new technology so the thoughput is increased and of course extra space Also worth getting a new HDD every now and then as they are mechanical so have a tendency to flake out.
Even if your only copying DVDs a faster HDD data transfer will make a difference to buffering them etc.

2 gig of ram is not much now but if want to spread the cost make sure it can be expanded on nice and easily with spare slots so your not taking out old ram and paying for new!!

Although Win 7 is not so memory hungry its worth having as much as you can afford as what we expect to be running on a pc keep increasing. Plus of course the old future proofing as long as possible.

As Les points out well worth getting a separate video card even Windows and office seem to be at times a little graphic heavy plus worth looking at if you use more than one screen which if working on excel and documents changes the way you work for the better by far

But you can always hold fire on the Video card for a few months until they are likely to be a tad cheaper as is often the case with PC equipment.