Dude honeslty all your gonna be able to play is some indie games in steam. Honestly plan on doing a new build from the ground up other wise get a ATi 4850, and upgrade the RAM to 3 gigs or start saving for a new system. You could even see if you can get at least to something with a dual core and ddr2 at least and should really aim for a ddr3 platform to make the system last more than 2 years.
well, I would save my money and in a year I'd build a new PC from a scratch /since components get cheaper over time, I'd get a more powerful machine for the same cash/
as for now - there are a lot of good old gems that are playable on your PC - Baldur's Gate, Planescape Torment, Arcanum, Vampire The Masquerade, SilverFall, Final Fantasy VI, VII, Might and Magic series, The Elder Scrolls Arena, Daggerfall, Morrowind, etc...
also - there are a lot of emulators which let you play good old super nintendo /play station, sega, or even ZX Spectrum/ games - the graphics may not be on par with today's standards, but storywise they are way better than most of the crap that is produced today