You definitely NEED more video memory if you are going to have a prayer of getting SCII to run decently. (see under options->Video->Textures: 128MB [this is your video card] - Suggested low, 256MB - Suggested Medium, 512MB[unless you want to go with the 55xx series this is still where you will be left] - Suggested High, 1024MB - Suggested Ultra)
Beyond this, you have to consider that a decent Hardware Audio Solution (at least X-Fi Fatality or = to) may also help you squeeze more "pretty" into SCII.
Finally, you may want to Check with the support staff at Battle.net for specifics about what they have tested the game to run on Ultra or High Setting with as they are pretty helpful with performance issues.
Like I said, there's ways around this, but it's 1. Troublesome and 2. not officially supported.
edit: Hmm ok, spoiler didn't do what I wanted, which is put the list as collapsed and hidden. Anyone know the syntax for that command on these forums by chance?
I just use [ quote ] [ /quote ]. Or [ code ] [ /code ] (if I need monospacing).
While getting a better CPU wouldn't hurt, I agree with banthracis that a better GPU is absolutely the way to go.
I was able to play the beta on medium on a C2D system with an nVidia m8700. I play it on ultra with my Phenom II X4 & 5870. Graphics are going to be more dependent on the graphics card. The AI is going to be more dependent on the CPU, but if your budget is only $150, the only realistic upgrade you have is a graphics card. I'd get the GPU now, then if/when you get some more cash, think about upgrading mobo/cpu/ram. And then begin the cycle again, or crossfire/sli whatever GPU you get now.
I bought an ATI 4870 1GB and a new 600W power supply. SC2 automatically maxed out all graphics settings and details. Runs great so far (campaigns only). Hopefully my CPU can handle the added workload of 4V4 online play?