Yes, a 2.x P4/0.5GB RAM/80GB HD is effectively obsolete, or very low end if you were able to order one today.
If it's only lack of RAM that is the issue then it may just be worth adding in more RAM... 30 mins of downtime to fit a couple more sticks versus transferring everything to a new server and ironing out the quirks, ...
If I were you I'd ask for a discount on your existing server (since the h/w is obsolete) and perhaps ask them nicely if they can throw some more RAM into it. They've already written off the hardware so they're not losing any money... $149/mo for that spec is almost pure gravy.
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