the specs you listed will most definitly run HL2 engine based games, BUT...
you need a videocard. save up at least 100$ and drop it on that.
or, sell your current rig, use the money to get a new card. i cant stress how important GPU's are for gamers. even if you have a 2.0ghz dualcore and only 1gb of ram, with the proper operating system you can still pay many of the high end games IF you have a bomb GPU...
if you want help finding a card, i can help you look, or peter can, we are pretty much on the same level when it comes to hardware
in 2 years XP is gone be dead.... so you gone have to move on Vista or 7
NEVER. ahaha