Yeah, you could upgrade the motherboard and processor alright, but you will need to also buy some new DDR2 or 3 (depending on your choice of board) RAM and possibly a graphics card as being a Dell, it will probably only have intergrated or an AGP, neither of which will work.
The hard drive can be brought across as most motherboards still have an IDE port but you'll have a lot of trouble with drivers from the old system I'd say. Perhaps take screenshots of the layout of the desktop etc. and backup the documents, then write a list of every installed program and reinstall XP followed by the programs from CDs or the internet where needed
...maybe there's an easier way
From what you say a Core 2 Duo e2180 or e4500 should do