I just want to know what can be upgraded easily to improve my D3 experience. At this point, I can't run the game on 1080P (can do 720, though) and there are some frame-rate issues even not on full settings.
You'll have to take a peak at the specs on the graphics card. It will tell you what the min power supply is. You can find something cheap in the $50-$100 range psu-wise and any graphics card in the $200-$300 range should do her.
Installing a video card is almost as easy as upgrading your RAM, you just need to make sure your Motherboard can handle it and there is enough space to either upgrade to a bigger one or install a second. Seeing as that motherboard only has one PCI-Express x16 slot, your either going to have to buy a new motherboard or just upgrade the card itself, plus you will need a higher power supply: I'd suggest at least 650W+.
I upgraded an hp system with a cardboard motherboard that couldn't be overclocked. I went from a 9600gt to a gtx 295 so I could max Dragon Age: Origins. I changed the psu to an 800w and obviously changed the graphics card. The PSU wasn't modular so the cables clogged the system and the graphics card put out obnoxious heat and it had zero air flow but the game (a moderately demanding one at the time) played very well besides the cut scenes. I later upgraded the case and motherboard so I could overclock the q8200 to 3.0 Ghz from 2.33 but it looks like your machine has an ok motherboard. I'm pretty confident your mother board is pci 2.0 so you'll be ok from that aspect. I'd still upgrade the power supply but I'd bet you'll be fine.
For the money you can get the following power supply:
I've heard that the ocz PSUs are solid, though I use corsair in both of my builds.
You'd be paying $230 (including rebate but not inc shipping and tax) and you could sell the dvd combo drive for $20 or something on amazon. I bet you'll be ok at that point. If you have an unlocked bios, odds are you have a better motherboard than what came in my hp pavilion. Your cpu may or may not bottleneck the gpu but you can get a 1090t or something later. Heck you could probably get the bulldozer if you wanted to.
The 550ti only needs 1 slot but it then hangs over taking the internal space of a second slot. It doesnt actually need a second slot to connect too the space it takes on the 2nd slot is just the fan and cooling stuff this then vents out the slot at the back of the case.
Looking at your setup it will fit. Your PSU would probably handle it but a quality 500W may be a good idea (OCZ do cheap decent quality).
You may want to look at replacing that CPU with a quad Phenom II while they are still about too if budget allows.
any card over a gtx 250 will likely bottleneck on that old amd cpu... they just dont have the bandwidth required to run higher end cards...
the 250 will allow you to play d3 but at low settings but you will be able to run at 1920/1080
but the sad truth is amd dual cores just dont cut it for todays high end games... you really do need a tri core minimum and preferably a quad...
check your motherboard manufacturer and see if they have a bios that will support quads. if so the get a new cpu as well as a gpu...