Helping people with computers... one answer at a time.
The decision of when to replace a computer is not an easy one. It involves not just replacement costs, but the cost of your time as well.
How do you know when your computer is ready to be replaced? Over time (6 years) mine has crashed more and more frequently. It's to a point that when I re-format the hard drive and try to re-install XP, it crashes halfway through the installation, usually with some sort of VxD error. I only have 512 megabytes of memory. Would more memory help, or am I just throwing away money?
Oh, I wish there were a clear answer to this one.
In reality it's a complex equation involving your time and your budget.
Let's look at what you've shared about your computer specifically, and then generalize a little into the things people should be thinking about when faced with that decision.
On the surface it seems like your computer is suffering from hardware related problems. Specifically what hardware is beginning to fail is hard to say: it could be your power supply, your RAM, your motherboard, your hard disk - failures in any of these could result in the symptoms you're describing. What's more frustrating is that the problem could be a very inexpensive repair, or a very costly one. There's no way to know at this point. (And no, adding memory is unlikely to help. 512 megabytes should be enough for an installation to succeed.)
You could start the do-it-yourself process by running things like a memory test, or perform a more thorough hard disk scan and repair. But once you get past those kinds of diagnostics, it gets a little difficult for the average computer user to actually diagnose specific causes of failure.
That kinda sucks, to put it crudely, because this of course leads to your first possible expense: paying a technician to examine your machine, diagnose your problem and recommend a solution. Assuming parts are available, their cost plus labor gives you your initial replacement cost.
At this point you'll have a number (cost of repair) that you can compare to the cost of a new machine, and at this point my expectation is that the cost of that shiny new machine is going to look pretty good. It's tempting to revert to the old adage: if it costs more to repair it than to replace it, it's time to go. The problem is that the "cost" of replacing a computer can be so much higher than just the money involved in purchasing replacement equipment.
Before you leap to that new machine, you also need to consider a few additional costs you're about to incur:
OS Setup - if the new machine comes with an operating system preinstalled, this is partly done. The hidden cost is the time you'll invest in the customization that to make it work like you want it to. Depending on your own preferences this could be a little or a lot.
Application Install - it's unlikely that the new machine will come with every application you've been using. So, plan on some time to reinstall those applications on your new machine, and perhaps even re-downloading some that you didn't get on CD. (Even the "application moving" utilities that might do some of this for you will take time to setup and run.)
Data transfer - you probably have data on your old computer that you'll want to take with you to your new one: email, photos, documents, what have you. Regardless of the techniques used, transferring this data will take time.
Disposal - this is relatively new to the discussion, but these days we also need to take into account proper disposal of old equipment. Some communities have free programs for this, others have a for-fee electronics recycling approach. In any case, simply discarding your old computer in the trash is no longer an appropriate way to get rid of it.
As you can see, the most frequently mentioned hidden cost is your time. Moving to a new computer is a little more complex than, say, getting a new car. The amount of effort spent in setting things up and moving over is quite different.
And that's why it's a difficult question to answer. Depending on the time/money tradeoff, getting your computer fixed and then not having to do anything to move could be significantly more appropriate for some folks. On the other hand, some are quite happy to use this type of situation as an excuse to get a shiny new machine.
So when is it time to get a new computer? When the cost of repair exceeds the cost of replacement, as long as you make sure to count the entire cost of both alternatives when making the decision.
And those costs will be different for everyone.
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