These suggestions are good, but for a quick and inexpensive solution you could upgrade to an HD 4670. It would set you back about 60-80US but would provide quite a boost to what you have currently without the added expense of a power supply. It would add some life to that old system for the time being.
Of course long term a beefier power supply and more powerful graphics card would be desirable.
I would go with the HD4670 option if you are just saving toward a new PC/ system upgrade in the next year or so.