nVidia 6800 based graphics cards are old, but they support Aero Glass effects. They can use the latest
drivers from
www.nvidia.com.
As regards your RAM, if you mix stuff, it would generally run at the settings of the slowest DIMM. Getting rid of the two 512MB DIMMs might be a good idea. I see that the largest ones the 8400 will accept are 1GB.
I doubt that upgrading the CPU would be worthwhile. If a 3.4GHz CPU was available (and compatible), you'd hardly notice a trivial boost like that. (Also, upgrading the CPU looks a bit awkward. The 8400 uses a shroud and fan that looks nothing at all like the standard Intel heat sink and fan.)
You'd be on your own in upgrading to Win 7 - Dell doesn't offer any
drivers for the 8400. Looking at the list:
Drivers & Downloads
The only thing that leaps out at me is that it uses an ADI (Analog Devices Inc.) onboard sound chip. ADI doesn't make its
drivers available directly, so you'd have to find a source for them. (Maybe that's easy. I haven't checked.)
I have no idea how happy you'd be with Windows 7 on this system, but I've seen it run OK on lesser systems. Your CPU is single core, but it supports hyperthreading, which is the next best thing to dual core.