XP Media Center Edition 2005 is a flavour of it's own.
It's based on the XP Pro edition, with some business bits removed and Media Center added.
Unfortunately MS will no longer supply a free download as they used to do, to be used with your purchased key.
If you know anyone with the CD, you can use it to install using your key (assuming you can still read all 25 characters).
You probably won't be able to find it on sale as it's now fast approaching being removed from support altogether.
Windows 7 will
probably run on that hardware, but buying it is an expensive way to find out, and it might not perform very well.
For the same sort of money you could probably get a cheap laptop with Windows already installed.
You could try to borrow a Vista or W7 DVD and install either (you get 30 days free trial before it insists on having a key or self destructing - make sure you skip the "enter key" page at the beginning).
That way you'd know if it would run satisfactorily on your hardware before laying out the cash.
A completely free option you might like to try first would be to download a Linux distribution and install that
Download Ubuntu Desktop | Ubuntu
You don't need to be a Unix Geek nowadays to use Linux. They're getting more and more user friendly (should I say Windows-like), and for every Windows application imaginable, you'll find a free alternative.
Depends on exactly what you want to be able to do with the PC whether you'll find it suitable.
For web browsing, email, media viewing etc. it'll be fine.
As long as you don't have some Windows-only app it must run. (and even that would probably be manageable with some advice from one of the Linux users on here)
You said in your OP "formatted the entire PC".
Did you really wipe
every part of the HDD ? or just the C disk ?
It's quite possible that hidden recovery partition, placed there by Systemax, is still lurking around ready to "factory reset".
boot the Linux CD in "run from the CD, do not change my PC" mode before you try installing it, and take a look around at what's in the PC. If you find a partition you didn't know about, contact Systemax about what hotkey combination they use to kick off a recovery process.