if i were you id look to get 2 more gigs of ram, a better processor, and the get your video card.. youd just be wasting your money on getting a video card.. with your ram and processor bottlenecking you you wouldnt see that much more improvement. soo... 2 more gigs of ram.. a processor then a video card..
Despite the processor not being ideal for current games he has a 7300 at the moment and would certainly see a massive improvement with a better card like the HD5670 sabot recommended.
Considering you said you have up to $200 to spend adding another 2 gigs of ram is a good call.
From what I'm seeing your system can handle better processors, up to the Q6600. It would be a good upgrade if you want your system to last a few more years.