New pc!

Yeah, moar RAM would be nice. I upgrade mine from 1GB to 5GB, and she runs well now. You can get 4GB DDR2 or whatever for about $60 nowadays. I think thats what I paid for mine.
 
Your hard drive doesn't have much to do with your performance capabilities. Your 3 factors are:

Memory
Processor
Video card

It sounds to me like your processor and video card are good enough. You just need to add memory. Find out what kind of memory your motherboard takes by doing a google search of the model number of you computer. Memory is inexpensive and you can probably add 2 gigs for 30 bucks or so. My laptop had 2 gigs and it would overheat and have poor FPS in minecraft multiplayer. When I upgraded to 4 it has no problems.
 
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