With your current system, i need to know the exact model of your PSU but i think it will handle the increased power usage.
As for video card i would recommend this one http://www.newegg.com/Product/Product.aspx?Item=N82E16814130562
or this one http://www.newegg.com/Product/Product.aspx?Item=N82E16814125334
for the 200$ price. If you play or want to play at resolutions over 1680x1050 go for the 1Gb model witch scales better and it is only 30$ more expensive http://www.newegg.com/Product/Product.aspx?Item=N82E16814125333
You also need to upgrade you CPU. The one you have is not that good. Something like this might help http://www.newegg.com/Product/Product.aspx?Item=N82E16819103279
You can buy a second 2Gb RAM kit but that is not a must have especially when your PC is not that new.
What model of RAM do you have, any links to it?
With the new video card and the new CPU you will see your games fly. If you play at 1280x1024 buy the 768Mb GTX460. You will not need more.
After this upgrade a new PC would sound good, not worth to upgrade again because some of the components are old.
The CPU will draw the card's performance dawn, so it is a must also.