That's a great deal, pretty much anything with a discrete video card for under $480 is a great deal. But I'd change the power supply first, it's not a brand that is known to last long, they usually last around a year or two and offer very little power for the amount of watts it's rated at. Here's a power supply I'd recommend if you're on a low budget. http://www.newegg.com/Product/Produc...82E16817341016
Cheap and works well.
CPU would be a reasonable upgrade in a low budget and current time. GPU can be upgraded, but I strongly recommend not to since the new generation for ATI is coming out on the 10th. For the CPU to be upgraded to, I'd either get this: http://www.newegg.com/Product/Produc...82E16819103649
If you're/he's/she's doing a lot of video production, minor overclocking, and playing games with multicore support. http://www.newegg.com/Product/Produc...82E16819103680
If you're/he's/she's doing heavy overclocking, playing games without multicore support, and does a little video production.
Personally I'd choose the first one, since I like to overclock, it's extremely addicting if you're a tech geek and I don't pay for 200mhz for like $50 and that I like to future proof it as much as I can.
sakumo i would like to know how overclocking works for my CPU as well. I can use the ATi Overdrive that comes with the Catalyst Control Center for my graphics card to overclock it safely, but how do you overclock a CPU easily?