your CPU is ok for SCII, your graphics card can use an upgrade. look at the ATI 5750 or 5770. both are power efficient and should run on your PSU if you can power the 7900GS. the 5770 is the better card of the two.
I'd say that ct1615 is exactly right. At 1680x1050 the 7900GS is pretty old for more modern graphics. It's due for replacement.
The Athlon X2 6000+ is fairly aged as well, but for SCII it should be okay.
Is your Windows Vista 32bit or 64bit? If it's 64bit, I'd also suggest finding some cheap RAM and doubling your system memory up to 4GB. That and the upgraded graphics card should not only improve game performance, but alt-tab'ing should be a bit smoother as well!
Ah ok, now should I get 512mb or 1GB which one and is there a notable difference between the two.
For the ATI 5770, you might as well get the 1GB. The 512mb cards out these days are usually old school cards, or designed to be "budget" minded options. The 1GB would definitely help with higher resolutions, or higher texture settings (higher detail settings).
In the <$200 price range, the ATI 5770 should work very well at your resolution. If you wanted the best possible performance for your money, the GTX 460 would be up at the top end of your budget. However, it's not necessary, and could potentially be limited by your CPU in some situations.
Unless you intend to do other upgrades, or play more intensive games (from a graphics standpoint) the ATI 5770 should be your best over all value.