The CPU can indeed be easily downgraded to a 3k+. I have one myself, backed up by a gig of DDR and a Radeon 9800Pro. I can run HL2 at almost full settings at high res. (Only AA has to be turned down a bit).
But, I'll repeat, the PSU better be good. Also, if you want this thing to sit in living room, or in a bedroom and leave it on while you sleep, check the noise level on the parts. A graphics card will add some noice unless it has either passive cooling or something water-cooled. The AMD procesors will clock themselves if idle back if you tell them to in the BIOS. My 2Ghz AMD64 3000 runs at 1Ghz most of the time, with the CPU fan standing still.
Other parts to check are casefans, bigger and slower is better, and the PSU.
EDIT: I see you edited.
I'm not sure how fast a 2.4Ghz P4 is, but what I wrote above should give you a fair estimate of your own new rig. Keep in mind that even during HL2, my CPU isn't at full capacity most of the time. My graphics card seems to be more of a bottleneck.
A 400 watt PSU sounds good, but bare in mind that just watts don't mean everything, check for reviews.
