8 years is old, but it is probably still capable of doing what most people do with a computer, general office work, web browsing, email, etc., so long as you don't need any of the more advanced features that have come out since, such as USB 3.0 and Thunderbolt. If it can be made fit-to-task again, I would't get rid of it just because it is old.
I'm not a tech guy, but it seems to me that If you've used FileVault 2 on your internal disk, then you'd need to unlock it. It ought to ask for a password. Perhaps your admin password admin will do the trick? Otherwise, have you tried to just repartition the drive, then do a clean install?
If a reinstall doesn't do the trick, I'm not sure how much time/effort I'd invest. the newer models are awfully nice.
