Kevin Wood - most desktop motherboards cannot do PAE. Generally, desktop based OS cannot either (not specifically checked Vista or Win7 to be honest), as you are not really ever going to gain on what is a single user system. Linux can though

. 64bit does start to become more useful as you go beyond 4Gb, and with Win7, 64bit generally has good driver support.
MDTM - I am guessing your needs aren't major, you just want something a little more up to date, and something that will last your for 2 or 3yrs. In which case, I wouldn't get too hung up on memory, unless you are going to be doing masses of video editing. Its always easy to add later.
My own desktop, probably 3yrs old now, is a Dell 9200, Core2 Quad, 965 chipset, 2Gb RAM, and a pair of 320Gb HDD in RAID0. Its more than quick enough for most uses.
If you are going to use for heavy Media Center use, you need a huge HDD. My MCE has a 1.5Tb HDD, and it's crammed full.
If you go for the Dell, I think its 7% cashback via Topcashback, and Crucial (my preferred memory supplier is on topcashback). If you haven't got a cashback site, or get annoyed with Quidco's £5 annual fee, try topcashback, which is free.
If you sign up (free) to topcashback via my link (
http://www.topcashback.co.uk/ref/theboy) you get £2 just for signing up (I should add, I get £3), this offer expires at end of 1st Nov.