I have nearly exactly that machine, a Dell Precision 490, but with 3.0 Ghz processors instead of the 2.66. It isn't a stellar performer in CPU limited games like Starcraft 2. But in shooters, it is absolutely fine.
So to answer your question, the HD 7000 series are reputed to NOT work at all on PCI-E 1.1 and earlier, due to power routing strictly adhering to the PCI-E 3.0 standard. The Nvidia's (PCI-E 3.0) don't have that issue, so if you were to add a current generation video card into the Dell, I would recommend a GTX600 series card.
Other than that, bandwidth of the PCI-E bus is sufficiently high even at the PCI-E 1.0 standard for a card in the league of GTX 660Ti. You shouldn't notice much, if any performance degradation. I do remember from memory that the Dell Precision 490 has only 1 PCI-E power cable, so the GTX660 series is about as powerful as you can toss in there, in the stock configuration.
In case you were curious, here are some results (BF3, extreme resolution, frame rates of cards of the current generation as a function of PCI-E lane reduction) from the excellent review site TechPowerUp:
Taken from the full review:
http://www.techpowerup.com/reviews/Intel/Ivy_Bridge_PCI-Express_Scaling/6.html
I must caution you, that the way the test is conducted, the HD 7970 card is ran on a PCI-E 3.0 compatible board (same as the GTX 680), but the board itself has a BIOS option that allows you to toggle the signalling config of the PCI-E slot. I quote:
"This review is made possible thanks to an awesome BIOS option given to us by ASUS ROG Maximus V Gene motherboard, which allows us to toggle the CPU's PCI-Express root complex between PCI-Express 1.0, 2.0, and 3.0 modes. To modify the number of lanes available to the GPU, we used common plastic adhesive tape."
On a board that only supports up to PCi-E 1.1 or less, you're unlikely to be able to run any HD7000 series card.