In need of a upgrade.

I quit gaming for a longggg time and lets just say my pc needs an upgrade bad. I'm deciding between upgrading my pc or just going out and buying a XBOX 360. I don't know much about what to upgrade my pc in but I know the specs suck. What should I buy first in upgrading I'm not looking to spend alot of money but just enough to get it to run most recent games.

AMD Sempron 2400+
1.66 GHz, 512 MB of Ram
ATI Radeon 9550/X1050 Series

i was actually thinking the same! between upgrading and an xbox 360...i would go for an xbox 360 - current scenario - it will last atleast 3-4 years. My current rig though is decent enough to run games at medium to low resolutions...planning to get a 4850 soon.