how to improve my old computers perpormance

128MB of RAM is surprisingly low. Yes, increasing to at least 512MB or a GB will almost certainly be the best thing you can do.

I would also recommend ditching Windows and installing Linux (but this is a more controversial piece of advice and depends on what you want to use the computer for).

Definitely more RAM.
That's really the only thing you can do easily and cheaply.
Check to see how much the motherboard can handle.
If it's that old it might only be able to take 512Mb.
Even so that's 4 times what's in there now and will make a big difference to the performance.

You could get yourself a new processor but that depends again on what the motherboard can take.
You might be able to get away with a P4 all the way up to 3GHz.

Check the motherboard specifications.

If you can give us a little more info it would help..

More memory will certainly help if you have more than one program open at a time.
How full is the hard drive?
Has fragmented is the hard drive?
If you want to make loading of programs faster then there are several things you can do hard drive wise to help including putting in a raid card.

A P4 at 1.5 is fast enough to do most office tasks and internet surfing with just a little tweaking. You won't be playing the latest games or running graphic intensive programs but for general use it should be OK.

Word of thanks !!
Thanks guys it really helps a lot , God bless..

<Fondly remembers playing Ultima on the original IBM PC (4.7 megaherz and 640K of RAM)>

Whenever I have updated my RAM, I have used this:

http://www.crucial.com/systemscanner/

You don't have to buy Crucial, but I have and have been happy with it.