Graphic Card recommendations

I just finished building my first PC and am still new to video cards. I installed a Nvidia 7200GS with 512MB of DDR2 RAM. This card actually lowered my Windows Aero & Gaming scores from the mobo video card (Nvidia 6100). I am now looking into upgrading to another card and need some advice. Would I see any difference in going with a 7900GS with 512 DDR3 RAM? Or should I bite the bullet and get a 9600GT with a larger power supply? I forgot to mention my mobo is PCI Express 16X (not 2.0).

Do not worry about the PCI-E version, as long as the MB supports at least one slot at x16 speed you should be just fine.

I have an AMD 2.7 Ghz dual core with 4 GB DDR2 800mhz RAM. My monitor is a Samsung 23" 1920X1080 full HD monitor. My power supply is only 300 watts but I am not opposed to installing a bigger one for a better video card.

I will not be using this computer for much gaming but I have noticed that HD video is very choppy with the 7200GS. Would the 7900GS be enough of an upgrade? I'm still considering a superclocked 9600GT which is on clearance at my local PC store.

As long as the 9600 has the correct outputs there will be no problems but you will need a bit more power (unless its a Dell 305W supply), about 400 Watts from a good maker will be ample.
Good makers: Pc Power and Cooling, OCZ, Seasonic, Corsair and Antec.
If you do little gaming or are just not too demanding look for a HD4650 (DDR3 if you can find one at a reasonable price), it will run of 300W.
Here is a list of cards, showing their relative performance:

http://www.tomshardware.co.uk/rade [...] 583-6.html

I went ahead and picked up a Sapphire Radeon HD 4830 for $70. I am going to get a OCZ 500 watt power supply tomorrow so I should be good. I will let you know how it goes once I get everything installed.