Solved: Help with pc upgrade plz

Hi, I hope I am posting in the correct section for this question.
I am looking to upgrade my sons pc for his birthday and need some help on which of these parts would be best to choose.
He wants to be able to run games like minecraft, Terraria and be able to use his HDPRV 2 he got for xmas. At the moment his pc doesnt seem to be up to it without problems. I am looking to purchase a graphics card as it is only running on the on board one that came with it, a new version of windows from xp to win 7 and a new power supply. Any help would be great and I am looking for best value for money for this plz. :)
His current pc is:
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System Information
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Time of this report: 4/29/2014, 20:22:17
Machine name:
Operating System: Windows XP Professional (5.1, Build 2600) Service Pack 3 (2600.xpsp_sp3_qfe.130704-0421)
Language: English (Regional Setting: English)
System Manufacturer: Acer
System Model: ASE380/AST180/APM8
BIOS: )Phoenix - Award WorkstationBIOS v6.00PG
Processor: AMD Athlon(tm) 64 X2 Dual Core Processor 3800+, MMX, 3DNow (2 CPUs), ~2.0GHz
Memory: 3328MB RAM
Page File: 1007MB used, 4203MB available
Windows Dir: C:\WINDOWS
DirectX Version: DirectX 9.0c (4.09.0000.0904)
DX Setup Parameters: Not found
DxDiag Version: 5.03.2600.5512 32bit Unicode

Thank you.