I upgrade when my needs outweigh the capacities of my pc.
The one I'm typing on here is a P3 800 which I use mostly for internet and everything else but DAW use. It's been rock solid for 7 years. No need to replace it for what I use it for.
I have a seperate PC strickly for DAW use. No internet, no garbage, no nothing. Strickly DAW. Just Sonar, Sound Forge and some related programs (plug-ins, softsynths, etc.) It's rock solid as well and I'll keep using it until such time as I need more horspower. At this point I don't, which suits me just fine.