ASUS M4A785-M AM3/AM2+/AM2 AMD 785G HDMI Micro ATX AMD Motherboard
Antec TruePower New TP-750 Blue 750W Continuous Power ATX12V V2.3 / EPS12V V2.91 SLI Certified CrossFire Ready 80 PLUS BRONZE Certified Active PFC "compatible with Core i7/Core i5" Power Supply
Budget isnt much of an issue. Looking for anything up to $300
ASUS M4A785-M AM3/AM2+/AM2 AMD 785G HDMI Micro ATX AMD Motherboard
Antec TruePower New TP-750 Blue 750W Continuous Power ATX12V V2.3 / EPS12V V2.91 SLI Certified CrossFire Ready 80 PLUS BRONZE Certified Active PFC "compatible with Core i7/Core i5" Power Supply
Budget isnt much of an issue. Looking for anything up to $300
If your motherboard supports it *I'm not exactly a expert in OS field*, You would see a good amount of gain from getting up to 4gigs of ram and 64 bit W7.
Edit: Looks like your motherboard goes up to 16gigs of DDR2 I'm 90% sure your computer would work but you need to wait for a second opinion to be 100% sure
For choosing your graphics card take a look at this list.
Your processor is quite outdated at this point. It is still passable for gaming but a new one would be a wise decision if you are going to upgrade your card. Fortunately although your CPU is quite old your motherboard is quite current. If you have $300 to spend then I would recommend these; http://www.newegg.com/Product/Product.aspx?Item=N82E16819103843
http://www.newegg.com/Product/ComboDealDetails.aspx?ItemList=Combo.456540
The processor is x3 but it is actually a quad core with one of the cores locked. Your motherboard has the ability to unlock the 4th core in the BIOS. It isn't guaranteed to work but the odds are very good(80-90%) that it will. If you are willing to spend more on the processor your motherboard can handle all current AMD processors such as a Phenom II x4 or even x6; http://www.newegg.com/Product/Product.aspx?Item=N82E16819103808
http://www.newegg.com/Product/Product.aspx?Item=N82E16819103851
Thanks you very much for the replies. The x3 looks to be a very nice processor, and quite affordable, too. Can many games make use of more than 2 cores?
Most still only use two cores but a number of them do use more and that trend will only increase as time goes on. Keep in mind that you aren't only adding more cores but the architecture of the Athlon II is different from the Athlon 64 and significantly more powerful per clock cycle.