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My bottom line theory on this is if you have not upgraded in a long time and you need to buy a hard drive, video card, new CPU (Plus adapters, BIOS etc..) and RAM all at once and the cost is close to the price of a new computer then you should probably spend the extra money and go out and just buy a new computer rather then buy all these upgrades at the same time. This is also an important option for those of you that do not want to perform and upgrade your self, especially when you tack on an extra installation fee of $50 for each component. A new computer can save you time and money in these examples.
However, if you are like me and find it far simpler to spend $50 or $100 once in a while, then it may be worth it to upgrade your system. I just can not afford to buy a whole new system at once, so I get it in pieces by upgrading slowly over time. By upgrading my weakest component every now in them I keep my system functioning at a level that I am happy with. For example my latest addition of a PowerLeap adapter with a K6-2 processor has been working great for months and it has been fast enough to run all the newest games I have purchased.
Also if you are like me and you enjoy upgrading it may be worth it simply for the pleasure. It can be lots of fun hooking up the latest technology and testing it and seeing how it works. Many of you share this love of computers and we would miss this activity if computers were not upgradable.
The upgrade path can go on for quite a while if you plan for future upgrades and as long as your computer can handle additional upgrades. Unfortunately even this path can come to a point where the system can not be upgraded with out a big expense in money, at this point a new system may be the best option. Then just think what you can do with your old system:
As computers get cheaper and cheaper I am sure the upgrade path will make less sense then buying a new computer. The day of disposable computers costing very little is a goal of many an appars to becoming more of a reality. I hope we don't see this day too soon because it will take away some of the enjoyment from computers. But for many the day is already here.