Yes, you cannot use that harddrive as the primary drive again in the new config, to fix this (the cheapest route) would be to get a cheap new comp (as low as $300 from DELL.com) and install this drive as the secondary slave, I can walk you through if you don't know how. It involved moving a jumper on the hard drive, and installing it with a two drive cable (IDE right?)in the new comp. I wouldn't bother replacing the motherboard or processor in 1.1G.
If you love the case and can't live without it, get over it, it'll cost more than a new comp most likely to salvage. It's different today new comps are so cheap and the lowest rung would be better than what you got (1.1).
Merry Christmas!