You sound like you're about to bite off more than you can chew, if you've never doen this sort of thing before.
I'll address your points one at a time :
1. windows ME SUCKS, big time. But I guess you already know that!
2. Being a Dell, you are going to be limited in your upgrade options.
I can tell you that your system supports :
AGP 4x Video (1.5V) MAX. Most new video cards are 8X. They will working provided they support 1.5V but they won't run at 8X speed, only 4x
RAMBUS memory only - this is the real pig. RDRAM is no longer being used in new systems & has always (and still is) very expensive. It must also be installed in pairs. You can upgrade it to a max of 2GB though if you wish.
CPU - your system has a socket 423 cpu. This is the very early P4, which has since been fazed out.
Hard Drive - your system does not support serial ata drives, only IDE drives. You can either buy a larger ide drive (but be warned that the bios may have a limit on the drive size it can recognize) or buy a serial ata PCI card. Because the bios settings on Dells are restricted, you may not be able to boot from a drive on a serial ata card. Even if you do get a 200GB sata drive to work, you will have 'fun' getting XP to recognize anything over 137GB. It can be done but only if you have a bios that supports 48 bit LBA addressing (unlikely but possible) or you partition the drive down into smaller chunks.
Also, you only have a 250W PSU with that system. This will become very restrictive if you start adding more devices (drives etc) to the system. The psu is also non-standard, so buying a replacement will be difficult.
The case is also likely to be non-standard, so you are probably stuck with the one you've got.
If I were you, start with the safe stuff. You should be able to buy a bigger hard drive (eg 80GB) to replace the old one. Installing XP on this shouldn't be a problem either. You then still have the old drive in tact in case it all goes pear shaped. You could probably upgrade the RAM also, but this will be expensive. Video card can be upgraded but only to one that supports 1.5V.
Hope this is of some help.
If you want to confirm what I've told you about your current system specs, download this program & run it :http://majorgeeks.co...tion_d4181.html