I can't find your motherboard on the MSI website so I can't say what the fastest processor upgrade might be. Any other description which might help? Did Tiny give the pc a name?
(You might find that in order to add a much faster cpu you'd have to replace the motherboard, then you'd want faster memory as well)
You already have 1gb of ram, so there'd be relatively little benefit in increasing it.
Your graphics card is a major limiting factor; you need something like an Nvidia 7600gs or ATI X1800 (I'm assuming your board has a pci-express graphics slot)or higher if your budget will allow