Youll have to get parts that will fit in that case. Best thing to do is ring up HP and find out what sort of PSU will fit.
As far as Grahpics cards go, she wants an NVIDIA GT430 (I dont think it will fit anything bigger) and they are pretty damn powerful for the Size.http://www.overclockers.co.uk/showproduct.php?prodid=GX-239-AS&groupid=701&catid=56&subcat=1863
You might want to invest in an external PSU though, your 160 watt PSU wont run a GT430. A 300 Watt internal would I think.