you may go for radeon 4670 512mb ddr3. this card will run fine in your pc. if you want more, you can buy -
1. radeon 4830 or geforce 8800gt
2. radeon 4850 or geforce 9800gtx+
but you need to upgrade your power supply to run stage 1 or 2 graphics cards in your system. and you can run up to stage 2 cards in your pc. though these are pci express 2.0 cards, you can run the surely.
upgrading you processor to pentium dual core E2200 (2.2 ghz, 1mb cache, 800 fsb) will be a great upgrade.