It should work....all PCI Express is supposed to be backwards compatible. There were some early issues though if I remember right. If it does not work you can always RMA it.
I am pretty sure you could go with an ATI HD 4650 or HD 4670 with that power supply. Either would be faster than the 9500GT and should be close in price. Also look for DDR3 if you can find it since it is faster. These lower end cards can not make use of 1gb of memory either...just not enough processing power. They put 1gb on them as a marketing gimmick so 512mb would be fine.
An HD5870 (the current fastest single-GPU card) does not max out a PCIe 2.0 x8 slot. This slot is identical to a PCIe 1.0 x16 slot. They did a test by modifying a x16 PCIe 2.0 slot to run in x8 mode and the benchmarks were identical so it didn't need the extra bandwidth.
It appears that the HD5870 is likely close to maxing out these slots but anyone with such cards would have a x16 slot.
There were a few issues with some of the first PCIe 2.0 graphic cards working correctly with the original PCIe 1.0 slots. These slots were quickly revised to 1.0a version slots though, and the graphic cards that had problems were also quickly revised.
In short, you would have to have one of the very first PCIe 1.0 motherboards ever made, and one of the very first PCIe 2.0 graphic cards ever made to even set up the circumstances that even maybe, might cause a problem.