Concerning price and upgradeability, this board will probably handle (I did not read the manual, doing this from top of my head atm) up to 2*1GB DDR @333MHz or 400MHz OR 1 DIMM @333MHz or 400MHz. Installing more will often underclock the memory with these sA chipsets.
Having said that, personally I think this could indeed fulfill what you mentioned here:
"with THIS PC I'm not chasing any granduer all settings maxxed out type of deal, for this PC I'll settle for most settings set to medium, maybe one or two maxxed out at 720p60fps, maybe 1080p60fps at a stretch"
though I don't know about the resolution you picked.
CPU is probably kinda maxed out, I'd leave it as this. Memory could be upgraded to 1GB at the least. If you really want to go 2GB you could, but you can make it work with 'just' 1GB if you stay with XP SP2 at the latest and don't push this rig too far (personally I wouldn't bother installing SP3 with a rig like this one here).
My guess is this board will not work with 2GB DDR1 modules.
Storage will be somewhat limited due to the nature of its onboard connectors. This board is µATX and if you really want to add LAN and a dedicated sound card, you'll have limited options for adding a SATA controller card.
Graphics card wise, I'd agree with what's been mentioned here before and get something like a GF4 or up.
GF7 will also work and I loved both my AGP passive-sinked GF7600 cards, but be wary that the passive cooled ones will have a higher chance of having failed due to bumpgate because these cards tended to be easier to overheat (which is the exact problem I had with my GF7600 AGP passive before adding a 8cm case fan to both).
Something faster than a 7600GS is probably somewhat wasted unless you want to play older XP games with everything turned to max or something. I was using run-of-the-mill 17in and 19in flat screened monitors (not CRT ones) with GF7600GS and GF6800 and games like BF2 and FEAR were playable. But BF2 would sometimes start lagging with tons of bots doing all kinds of things like crashing into each other. This was with CPUs slightly more powerful than the 2.08GHz one included in this royalty OEM build.
Remember that if you decide to add in a dedicated graphics card, you're probably gonna have to look into upgrading the PSU. Just adding in a graphics card (especially one that requires relatively more power) could require more power than that PSU can deliver (I mean it could catch fire or a short or explode or start smoking or simply refuse to turn on).
EDIT: Is it too expensive? It depends. What others have mentioned here is correct, you can get cheaper XP PCs that will also be substantially faster and probably also easier to work with (main limitations of this system will be the buggy VIA onboard SATA virtually limiting you to IDE, the perhaps dead or otherwise unavailable onboard LAN, max 2GB or RAM as it is DDR1, AGP which limits finding upgrades for a reasonable price, no upgrades for the CPU as it is already kinda maxed (fastest official AXP is 2.2GHz and 2.08GHz is really close to this official max), virtually unavailability of CPU HSF upgrades (more modern CPU HSFs will probably not fit), limitations for upgrading or replacing the PSU (needs 20p connector for instance), µATX limiting upgradeability and customization options of this system and board.
So in short, if you get this system you'll kinda be stuck with it as it is.