Just in the process of moving from a very similar 3-yr old system - (3500+, 8KN Neo2 with X800XL 256 PCIe, 2G DDR) up to the system included in the signature. reusing the HDD's and DVD from the older system. $792 from Newegg - the memory prices had just dropped $20 the day before and other components can be found in 'combo deals'
You could go for a budget dual-core and card and less expensive DDR2 but I don't think there's really much that can be done to enhance the single-core and AGP system
I don't even have FSX reinstalled yet but I did give the old installation of FS9 a quick run and was getting quite comfortable FPS in the 20+ range with EVERY slider at max; Ultimate Terrain and Flight Environment enhancements; Ultimate traffic and additional AI plans showing 774 ac in range, at LAX and if I don't have at least the basic FSX installed before the weekend is over, I may explode!
Hooked since FS4... now flying: FSX Acceleration on Win7/64, Core Duo E8400; GA-EP45-DS3R; GTX 460-768MB; 4G RAM; Freezer 7 Pro