I would say that what im thinking fits, Basically the power supply can only just power a 8800 card and so it struggles to power it for a while then the card dies as its been damaged by the effort its been putting in pulling the power from the sub standard PSU. Now you have fitted a much lower powered ATI card its not even needing to give it extra power so its fine.
The best card you can get for that system in my opinion is the 4670 from ATI as it also needs no extra power from the supply so should work fine.
Its not quite the same level of card as the 8800 though. Its good for gaming at mid to high details at reasonable resolutions, depending on the game.
Whats your monitor size and resolution and what do you play on it ? just CSS or others as well ?