I am assuming that the used 640 GB on your hard-drive is not just software as unless you had a lot of games it would be very odd to have that much software that you would constantly use. You might want to move or back up your personal folders and remove program's you no longer use.
If you are only using a 32bit operating system then adding ram will not help at all. If you are going to upgrade the CPU to an i5 then you would need to upgrade your motherboard as yours is a socket 775 and an i5 is either a socket 1156 or 1155.
A move to an i5 CPU and Windows 7 64bit and 6-8GB of ram would be a decent upgrade but I have no doubt Fruit bat, will post one of his lists to hopefully speed up your PC.