Dreamcast was expandable but *NOT* upgradable. you could not do CPU, graphics processor or memory upgrades to Dreamcast, as far as I know. There were no actual Dreamcast upgrades planned either. not even real rumblings of a DC upgrade. only false rumor, speculation, and a desire for one by Sega fans.
The Saturn however, *was* upgradable, and at least one, if not more than one, upgrade (3D) was developed for Saturn, but never released. that is in addition to the various memory upgrades Saturn did recieve for various games.
anything by NEC for a 'DC upgrade' that could run rings around the GeForce256 was stuff of fantasy. While the Dreamcast was an awsome, awesome console, running rings around the TNT, Voodoo2, Voodoo3, and perhaps rivaling the TNT2, the DC could not match the GeForce256, especially with DDR. even with PowerVR2DC's advantages over traditional architectures. PowerVR2 was only originally ment to rival Voodoo2, (not GeForce) though PowerVR2 ended up surpassing duel Voodoo2's in SLI, and in many areas, the Voodoo3 also.
like Deadmeat said, there was a Dreamcast2 in development. Sega President Shoichiro Irimajiri stepped down sometime around late 1999 or early 2000 to over see R&D on Dreamcast's sucessor, which I assume was already underway in early-mid 1999.