I would look at a possible upgrade to a low profile graphics card (sounds like a small form factor case). Outside of that... you don't have much room to expand your system with the limits of it being an OEM.
If you already have a gt 220, then you probably won't need to upgrade the power supply. That card won't show much performance increase and it won't draw that much additional power.
I wouldn't spend $300 on a graphics card/PSU upgrade with only an x2 processor, I would probably grab an HD4850 or GTS 450 for around $100 and grab this 630W rosewill PSU. Its more than you need at the moment but you could use it in a later build if you wanted to. Plus, its only $60. http://www.newegg.com/Product/Product.aspx?Item=N82E168...
Since you didn't specify a need, I assume games is the main purpose. If it is for watching movies/multitasking/anything else I would recommend something different.
Also be sure to disable the onboard video in the BIOS after you add a discrete graphics card. That will save power.
I'm confused. Are you just updating the graphics card and PSU or are you building a whole new computer now. If you are planning on replacing the Motherboard, you might as well get a whole new computer for around $500.
Well if your budget is only $300 that is going to be hard to do if you want this to be a gaming computer. Especially if you need an operating system too. There's $100 right there for win 7 home premium.