He did say that only 3.56 GB is usable. That MB does support socket 775 P4 Prescott 2.66Ghz. I would make sure that the on-board Intel GMA X4500 is disabled though.
Fallout 3 and Oblivion will run well on your system. I wouldn't try Assassins Creed 1, let alone 2. I tried AC1 on my old system with Athlon64 3200(equivalent of a P4 3.2) and it ran very slow, the GPU was decent so it was the CPU, Skyrim ran better then AC! You could try the Witcher, maybe Farcry 2.
You don't need a whole new computer, I saw a Core2Quad 6700 on Amazon for $45, used. I have only a Core2Duo e8400, 4GB and a Geforce 650ti. Farcry 3 and Bioshock Infinite run well.