You can upgrade to a maximum of an HD4850 or 9800GTX. After that your CPU will bottleneck everything, and it may already start to with those cards.
That's going a little far isn't it ? Not all D8400's came with a 3.6E.
The addition of a 7900 GTO was enough for me to dump my P4 3.0 Dimension 8400 for a C2D setup
I like the 350w/28a psu, but it's kind of aged at this point, I'd reccomend nothing more than a 4770 or 9800 GT Eco model.