http://www.tweakguides.com/HL2_1.html it may help.
I didn't make it!
I will have to agree with the suggestions already posted. Half Life 2 runs awesome with lag occuring during level tansitions, and that isn't even lag. Here are my specs which are quite similar to yours, and maybe it'll help others for reference.
Intel Pentium 4 CPU 2.60GHz 1 GB of Ram ATI Radeon 9800 Pro 128MB Windows XP
If you have a pentium 1.3ghz chances are you have RDRAM (yuk). This stuff is DAMN expensive as no one really makes it anymore. It would not cost very much more to buy a new motherboard, an athlon 2500+ and 512DDR 2700 which would give you a much better perfomance increase.
Also have you ever though about overclocking?
He has a Dell (read "expensive doorstop"), so forget about getting a new mobo or any upgrades.