ATI radeon HD 4850 will it work on this Mobo GA-M61SME-S2

Yes, it can use pretty much any current card. The better question is likely whether your power supply can handle the card.

Pheww thanks for the answer. Yea the power supply will probably be an issue since I have 400W and I red that the 4850 series need at least 450W.

BTW under any current card do you think it can handle the 5xxx series? Or is that just pushing it too far?

If it is a particularly good brand then a 400w can handle it, but likely you will need a new one. Alternately even a sketchy 400w can probably handle an HD5750 which is a slightly more powerful card and DX11 but also cost a decent amount more.

Those are certainly current cards so, yeah, "any" applies.

Well originally I planned to buy the HD5750, but I red on forums that people are having troubles fitting it in PCIE v1.0....

If it is 1.0 you could need to update your BIOS to handle it. Contacting Gigibyte's tech support to make certain before purchasing is probably a good idea.

What do you mean by "fitting"? A PCIe slot is a PCIe slot, they are all exactly the same, even the verison 1.0.
Now there was a few cards when slot version 1.0 went to slot version 1.0a that would not work in the 1.0 slot, but that was resolved rather quickly, and it had to do with a issue between the motherboard and the video card BIOS. I have not heard of this problem with any cards made in the last few years.
If you have an older 1.0 or 1.0a version sloted motherboard, the fitting problem might the slot is too close to other parts on the board, meaning the 5850, which is rather large at about 9 1/2 inches long simply cannot plug in because things like memory sticks, or other items are in the way. Hard drive mounting slots also become a problem on some older smaller cases, they end up being in the way as well. So measure and check these areas, but as far as the slot, as long as it is a PCIe slot, it will physically plug in as long as nothing else is in the way the card will hit.

Ah my bad I meant about the compatibility issue. Sorry for the misguide...