Need help deciding what to upgrade first

So I recently bought a new low-tier gaming computer for $200. I'm starting to think about what I should upgrade first, but I'm a little bit illiterate in the hardware area of computers. My computer is http://i.imgur.com/0ctPAdZ.jpg and if you could link me to a different place to learn more about hardware, or just tell me below, I'd appreciate it.

I'd upgrade the CPU, motherboard, and RAM. Your current graphics card, while weak, should be sort of ok for 1024x768. Of course, if you upgrade to a 1080p monitor, you'll need something more powerful.

I would suggest if that since you have only just bought the computer recently.  I would recommend playing with Overclocking the Core 2 Duo.  They have been pretty well known to be quite overclockable.  I reckon you should be able to boost the CPU to 3.0Ghz.  All you really need is to buy is a decent CPU fan cooler.

http://www.amazon.co.uk/Cooler-Master-Hyper-TX3-Tower/dp/B005HIRDUA/ref=sr_1_2?s=computers&ie=UTF8&qid=1398966625&sr=1-2&keywords=cpu+cooler

This very budget cpu cooler would be amazing upgrade from your stock cooler.  Notice it's an upright cooler.  Don't buy anything over £30 for a fan really because your cpu/motherboard will probably not be overclocked like crazy.  

Try this and if the performance isn't what you desire, you can always take the dive and buy much more expensive upgrades.  Of course this is just my suggestion.  I think this is pretty exciting route for any enthusiast.  You learn more about your PC parts, learn overclocking and appreciate the save in money ;)