Windows 7 Pro retail - 250$
RAM to run Win7 - 200$
Windows 7 Pro 64-bit w/SP1 - OEM version is only $139 on newegg. Even if you feel wary about the OEM version, since you have Win XP you can buy an UPGRADE license instead of full retail, both of which are identical and allow a clean install. The retail copy of the upgrade is only $175
Also, what RAM are you buying that's $200? Not knowing how old your system is, i can't say exactly, but 4gb of older RAM (DDR2-800, for example) can be had for under $50. Newer memory is even cheaper!
Newegg is your friend! (and so am i)