ArsTechnica puts out regular (and excellent) guides for this sort of thing. Here’s their recommended build for a budget gaming PC. Given the changes in standards, you’ll probably have to replace the CPU, motherboard, memory, and graphics card. Probably also the power supply. Everything else should be just fine. Ars’s suggested components here push your budget by $50ish, but you could also easily get away with a cheaper graphics card if you’re mostly into WoW.
You haven’t said what OS you want to run on it, Windows or Linux . I’d possibly recommend a barebones system-check out tigerdirect.com or egghead for those.
Checking at Newegg, you can get a combo of an Athlon 64 x2 7750 & 2x2GB DDR2 1066 RAM for $100, a Radeon 4770 for $100, plus a $10 MIR, and a Gigabyte 780G motherboard for $80, plus a $10 MIR. If you need a new power supply, I have been quite happy with my Cooler Master 460 Watt which I have had for a year; it is only $35 plus a $10 MIR. Total for all these parts is $314 before shipping and any mail-in rebates apply; there are $30 worth of MIRs in there.
If you wanted to save the cash, the integrated graphics on that motherboard are better than your current video card, so you could drop the Radeon 4770; my girlfriend’s computer has the same 780G graphic chip, and can handle Portal & Left 4 Dead fine, albeit at low detail settings. But having a real graphics card makes things look so much better. If your power supply is pretty good, then you don’t need a new one.
The MicroATX standard was specifically designed to be compatible with the ATX standard - the mounting points for a MicroATX board are a subset of the ATX ones, and the I/O panel is identical.
If you do want a full ATX board, this Gigabyte 770 chipset board should do the trick. Note that it doesn’t have the back-up of integrated graphics.
Also you may want to download windows 7. It’s a great free operating system (at least until june of next year) that’ll be happy to run on your new rig.