My computers going to blow up!

I feel sorry for my computer. I put it through so much shit! I need to give it a good format and reinstall everything from scratch. =(
It takes so long to open Photoshop CS5 or any of the adobe programs for that matter. It lags at very peculiar times which frightens me a bit. Its the only computer in the house and I can't really afford to get a new one. If this thing dies on me then I'm stuck with no computer =( No new music, no completing homework meaning I'm going to have to stay after Uni to do it. Which sucks! I'll have my iphone but thats about it. No computer.
What I'm thinking of doing is;
1. Buying a new HDD, my friend bought a new HDD because his one died and it cost him $80 for a WD Blue caviar which is of good speeds, something a bit faster then your average build. Which is why I think my computer is slowing down, my Disks are wearing out. Its a 3 or 4 year old computer =(.

2. Upgrade the RAM by another 2GB to make it a total of 4 GB but because its 32bit it'll only support 3.5 GB Which kinda sucks but still better then the 2 GB I have. OR if I can, upgrade the whole RAM and get a faster speed. At the moment my speeds are clocked at 800Mhz. Pretty slow so I'll possibly get 1333Mhz however at DDR2. My computers old, I don't think it'll support DDR3. I'll need to check but first things first is to just get another 2GB RAM stick just so it can run a bit more freely and have multiple Adobe programs open at once rather then have them shut down after the other.

3. My friend will be upgrading his GPU soon, he'll be getting a GTX 480 or possibly a GTX 580 which are both BEAST in the nVidia world. He'll be able to run Crysis 2 on possibly High-Low graphics on the single GPU depending if he actually overclocks it and or has a good PSU, I think 650W will be suffice for him.. So he'll be giving me his GPU which is the GTX 280. Thats pretty good on its own. Its 10x better then my actual GPU which is a GT 8600. Kind of sad =(. So hopefully I can get his GPU

4. Either way, even if I don't get the GPU, I'm going to have to upgrade my PSU (Power Supply Unit) I'm running a cheap 350W Thermaltake PSU. I need something over 500W to give the computer enough power to run above smoothly especially if I get my friends GTX 280. It doesn't eat a lot but if I do decide to overclock at a minimum speed it'll need the extra juice.

5. My CPU. This thing definitely needs an upgrade. However these don't come anywhere near as cheap at the above ones. I'm running a basic Dual Core 2.33 GHz processor. Its worn out, reason why I know this is due to the readings my computer gets. Task Manager>Performance>CPU meter 100% At this rate my computer will explode but I'm just thinking the only reason this could be is because the above hardware (HDD RAM PSU) isn't doing what its meant to be doing and the CPU is taking all the heat.

It'll cost me roughly $500 to get a decent PSU (which will cost the most, $200 and above) upgrade of ram (which is about $50 to $60), the HDD which is about $80 and if I do end up having to buy a GPU then that'll cost another $200+. So I probably will go over the $500 mark but this is all from last year figures. I'm sure prices have changed to become more expensive. err I shouldn't have bought a PS3... I should have upgraded the computer. (N)

Computer Please don't die on me. I need you. <3 I'll do a clean format of you on Friday, please last a week? <3