A ps2 is around 100$ now if you want cheap gaming.

Personally I'm keeping my old system (2.6Ghz, 9700pro) for another year. It still runs new games rather well (Prey at 800x600, but I'm not a resolution freak) and I rarely game anymore anyway. I could probably last longer than a year with this system but I'm going to try and get some money out of my parents before I move out entirely

If you don't game you don't need new hardware/software. Win98 is outdated because it isn't (as much) 'internet ready' so a lot of people switched to XP. I still know people running win98 on (nearly) 10y old machines and being quite happy about it.