I believe that the RAM upgrade (to 2GB DDR2) is justified, provided that the PC is otherwise healthy. Adding RAM is the quickest way to add speed to an otherwise weak or middle of the road unit. It will help with multitasking & will allow the user to create a smaller swap space, which will force the RAM to do more work, which is faster than the HDD.
Still, I agree that the CPU is a bottleneck, in the case of this computer, running an Xfce edition of Linux Mint would be preferable over the main edition. Though, I run the main edition (Mate) on lesser hardware in the IBM T42 ThinkPad & it's fine, it's faster than XP Pro on the same notebook (1.73 Pentium M "Dothan", 2 x1GB DDR RAM). I did upgrade that notebook to 2GB, it only had one stick of 1GB when I obtained it & it did make a difference.
My CPU is the bottleneck also, that Pentium M has more of the performance of a P3 than P4.
Cat