I am gonna spend about $200 and do some upgrading.

I was thinking to upgrade to a gig of ram (two sticks of 512mb ram). Another choice would be to stay at 512Mb, and instead get me an Athalon 3200.

I just want my computer to be ready to run HL2 as best as I can.

Suggestions?
Specs in my sig.

Well you posted in Cooling &Modding, so I'll play Devil's advocate.
Why not OC your 2500 . Should get pretty close to a stock 3200 !
Then go ahead and grab some more Ram.
It could give you the most bang for the buck,but you probably need a few extra bucks for some premium cooling.

Yes, that was exactly what I was thinking to do. OC my 2500 to 3200, and then get the 1gig of ram.

But the other option is to buy an actual 3200 and OC it to whatever it'll go to, and stay with the 512Mb.

For a gaming system, what would be the better choice?

Well if you are going to OC the 3200 anyway ,go for it, get it stable .Processing speed is still the bottom line when it comes to games.There are ways to optimize your ram eg. disable everything that is unnecessary,close all programs and stop as many processes as possible.512 Mg is not bad .
Then grab some Ram when you save some more coin.
Good Luck!

i bought a 2500XP and im running it as a 3200. one thing i would suggest is a new heatsink and fan.

all i did was change the FSB from 166 to 200, and it has been running absolutely perfectly as a 3200 with no problems since ive had it (coming up on 4 months now). with the new heatsink and fan, it also runs cooler than some of my mates' genuine 3200XP's :grinthumb

Thank you everyone. I ended up buying ram, and will be overclocking. :wave:

(got the volcano 12 sitting on top of my 2500 waiting for some work to do :giddy: )
Cheers.