Keep in mind, we're talking Windows 7 with 2GB of RAM total. Is this the 32bit or 64bit version of Windows 7? That could have some factor in overall performance as well.
Win 7 & background apps would probably love what, 1.3GB of RAM by itself potentially? Leaving 0.7GB total for the IGPU to use. Doesn't leave a whole lot left.
Adding a GTS 250 would make a world of a difference for playing games. As others already stated, the integrated graphics built into the i3 CPU is worthless for gaming purposes. It's great for just using a PC for internet, email, Office applications. But it's definitely not intended for any 3D applications.