Well, as far as your processor is, I think it's fine, atleast for a while. If I were you I'd get more ram and a better video card with that $400, or if you wanted to you could try and save all that and build a new system, maybe invest in some phase change cooling. What I'd do would be:
Unlocked Barton 2500+ ~$110
512MB of BH-5 PC3200 RAM (Sell your PC2700) ~$180
And maybe a new motherboard if the one you have isn't up to par with todays offerings. If you already have a good mobo I'd save the rest for either a good watercooling setup or towards a high end video card. There is alot of things you can do with $400 like.. high end sound... high end video... high end cooling w/ very overclockable processor... It's all up to you on which is worth more. The second option I'd choose would be to blow some on a Sapphire 9800np which should be ~$250 and then 512MB of BH-5 PC3200 ~$180 (you'd have to come up with some more $$ extra) and use the PC2700 + PC3200 together for a while or sell the PC2700 and collect money until you have enough for a new processor. You may be able to stretch your money pretty far with after Xmas pricing and good shopping skills.