Replacing your CPU is a possibility, but it would be a waste of time/money. To move forward, though, will require replacing your CPU and motherboard and possibly your RAM. Don't think in GHz, though, as the GHz wars were a marketing ploy Intel used to push the P4 line; the Core line onward are based off of the P3 architecture as Intel abandoned the P4 space heaters.
Since it is a Dell you are out of luck for overclocking. Pre-builts are locked so it can't be done.
I am guessing you are using the onboard graphics that came in your computer.
To reuse the most from your current computer you can go with a AM3/AM2+/AM2 motherboard that uses DDR2 RAM. here is a combo with a good board and a AMD Phenom II x4 945 for $165 plus shipping:
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