Some PCI-E 1.0/1.1 motherboards have issues with PCI-E 2.1 cards, but otherwise all are usually compatable, so check the specs carefully before you make a purchase and steer clear of PCI-E 2.1 cards.
Even now few games make full use of a Quad, most like a fast CPU instead so I'd suggest you invest in a decent cooler and overclock that E6850 rather than buy what is now, an obsolete LGA 775 Quad.
As for GPU 55range nailed it-The HD5770 is a minimum upgrade while the HD6850/GTX460 will allow faster gameplay at higher settings.
The PSU is more than adequate for any of these single cards.
Why not get yourself a cup of hot cocoa and a few biscuits and have a read here:http://www.tomshardware.co.uk/gaming-graphics-radeon-hd-6870-radeon-hd-6850,review-32039.html