So that's a generic PSU right?
First of all, you need a new PSU if that thing is generic(dangerous)
Second, what is your budget?
I kinda have the same rig as yours (Dual Core,5-year old rig)
What I did was, I bought a new branded PSU(FSP Hexa 500w) then bought a Sapphire 7750 1GB. I was on a tight budget but I made it fit.
I can play medium-high tier games but the problem was my RAM and my CPU.