You setup almost same as my system, except i have 9600gt 512mb and 2gb of ram. I can play games that mentioned at res 1366x768 in medium to high settings. just add 2gb more of you ram and get ati 5750. it will cost you around 130 dollar.
but i have 400W PSU as far i know ati 5750 requires minimum of 450W PSU....
So what should i do????