Most computers become obsolete long before they break. As long as your computer is capable of fulling your needs, it should be fine.

It's almost never necessary to buy a new computer. The computer I'm using right now was bought years ago and is still worth just as much today as the day I bought it, since I slowly upgrade individual parts. Except for the case, there is not a single original piece of the original machine. The most obvious immediate improvements you can make to your box are to buy a dedicated video card and more RAM. Both video cards and RAM are dirt cheap these days. For less than $100 you can buy an 8000-series GeForce card which, while it's a generation behind the most modern video cards, is quite capable of running every modern game on the market. For another $100 you can upgrade your RAM to a full 4 gigs. With those two changes, you'll feel like you have an entirely new system -- at a fraction the price of a whole new system. If you're willing to put out a little bit more cash, the next upgrade would be a new motherboard + CPU. Dual core at a minimum, and preferably quad core. A decent CPU will run you a couple of hundred bucks. Don't pay more than that, since you'll get diminishing returns. Doubling the price may get you 50% more speed. Quadrupling the price may get you 60% more speed. Etc. After that, the next biggest change would be a bigger and faster hard drive. Relegate your current hard drive to data storage and buy a new 10k rpm hard drive for your OS -- it'll run lickety split and make an appreciable difference to your experience. Bear in mind that these upgrades will require more power, and may be too much for your current power supply. Fortunately you can upgrade your power supply for about $30.

Ask yourself: What do you want your computer to do that it can't do now? Your answer to that question will determine whether you really need a new one.