My FPS drops while gaming 40goes down to 23... COD4? is it because of my Generic

It is because of the weak HD3870. The generic power supply puts your system at risk because it can fail due to cheap components and can take other components with it too. Anyway:
What resolution and graphic detail level are you playing at?

remember the 2 things you never cheap out on when building a PC: the motherboard, and PSU. I'd recommend picking up a better PSU, then GFX card.

PSU: http://www.newegg.com/Product/Product.aspx?Item=N82E168...
$40 BFG GS-550 (550W, jump on this ASAP! it's a very good cheap PSU)
Vid: http://www.newegg.com/Product/Product.aspx?Item=N82E168...
$100 HIS H485FM512H (ATI 4850, $10 cheaper than the 4770)

sir 1440x990 but still sir if I lower the resolution in 1024x768 it also drops

Do you think sir that my processor is weak also?

The CPU is pretty week too. Usually I would suggest an overclock to 2.6-2.8 GHz, but with that PSU I wouldn't touch it with a 10 foot stick  

You can get a few more FPS by OC'ing that proc, but as dragon stated you need a better PSU first. The one I listed is a good PSU that I have used before. If you want to OC I recommend picking up a new heatsink.
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
$34 Arctic cooling Freezer 7 Pro.
Then pick up the GFX card I mentioned above, as that 4850 destroys all of the 3xxx series cards.

Hang on a minuite am i going batty here or did no one actually ask what the specs of this PSU actually are ??
The hardware listed is weak compared to what i would consider mainstream at the minuite certainly but the two are pretty much well balanced.
Sure you could overclock the CPU a bit but as said its down to what the PSU is actually capable of.
I have seen generic PSU's at 600 Watts that could handle whats being suggested here easily.

So it depends on a couple of things for me, What Wattage is the PSU and if you know it whats the Amps rating on its 12v Rail/s
Also is the Hardware you listed as bought or is the PC self built or did you upgrade the Graphics,etc.

Mactronix

Getting a good PSU is must.
Your CPU as well as GPU are good enough for COD4.

Before changing anything else see if only PSU upgrade gives a boost or not...

specs:
e4500 2.2ghz
ASUS p5s mx se (no OC in BIOS)(not supported)
HD 3870 512mb ddr3
2GB RAM

Come on Pcman! They're asking for your PSU specs... even if it's generic, it should have a label detailing the specs on it.

What OS?

Windows XP professional - my PSU has no brandname sir... it is just stated here the the moedl number. MI-500 500watts... thanks for helping guys

Yeah I bought the 500 Earthwatts PSU for 59.00 bucks at Frys. The unit was able to power up my MOBO and HD ATI 4670 Card.

I just bought COD4 for my PC and it Rocks..According to the Fraps that runs in the game I am getting 50 to 60 frames per second!

This is on a Athlon II 250 3.0 MHZ

3 GIGs of ram

HD Radeon 4670 ( Bought it at frys for 100 bucks) Best buy I ever made..

Even runs GTA4 which is a bad port of a game at 40 FPS average.

Sorry about that I just got excited with my low buck high performance rig..I would definatly look at the PSU and possibly return it. May have issues. With a bad power supply cutting out power in the middle of the game sounds like it. Either that or your overmaxing out your Video Card. I had mine cut out like that once as well when first running COD4 but after a reboot it has not done that to me again. I play it for an 1 to 2 hours at a time. Hope that helps..