Dell inspiron upgrade

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Hi
I wonder if anyone can help. I have a Dell Inspiron 7500 with an Intel Pentium 3 processor, 601 MHZ. 128mb of RAM and Windows XP Professional. I bought this cheaply recently on EBAY just as a project to play around with. I have never worked on a laptop before so I am very new to this.
The laptop works well and is in good condition considering its age. It hasn’t been online for a few years and so has not been receiving Windows updates and looks really outdated. I haven’t tried getting it online yet. There is a faint wavery line running down the centre of the screen when it’s on and wonder if this is to do with the screen or the graphics? The screen is definitely not cracked.
I would like to know how I could improve it to the maximum possible. What processor if any, can I put in? How much memory can I go up to? Should I put in a new Windows XP if it will take it? What do I need to have a wireless connection to the desktop set up I have? Is there anything else I could do to make it good?
I would love to do this. Sorry for posing such amateur questions and thank you in advance to anyone who is willing to help me. (Simple terms please!)
Regards, Jackie

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Max CPU is only 750 MHz and max memory is 512 MB of PC-100 memory.

Ebay is about the only source for memory and any upgrade might cost more than the whole laptop cost. You may also find that your laptop needs "low density" memory chips which cost even more.

I did a 600 to 800 MHz upgrade of a Compaq and it required a complete dis assembly of the laptop. I had a repair manual that listed the correct screws to remove (over 15 screws of 3 different lengths). This is not an easy task and you might only have a 50% change of success. You may not notice the difference between 600 and 750 MHz unless you max out the memory at the same time.

A CPU upgrade is not cost efficient. You will get better results with upgrading your hard disk to a 5400 RPM drive with a larger cache.

I would not spend over 50 pounds total since your screen may fail at a time.

I would just apply the SP2 updates to Windows using a downloaded CD and then get a copy of CCleaner to clean out the registry.

Good Luck