You should have a 500W PSU really for that system maybe a 450W would be ok. Also it depends on what games your playing their settings. Your not going to be able to play crysis etc on max settings and res without getting lag for example. Your 5770 if a good card but your CPU is not great and 2.6GHz isnt gna help.
Id overclock your CPU to 3.5GHZ and the 5770, then youl see vast improvement.
However if you truly want no lag go for a 5870 or 5970 and upgrade your processor and psu.