Will my old motherboard hold back a graphics card upgrade?

Well, physically, a PCI-E 2.0 card will work fine in a 1.1 slot. Unfortunately, there haven't been any recent articles I could find detailing the performance hit of using a 1.1 slot. Tom's did an article a while back that you can find here: http://www.tomshardware.com/reviews/pci-express-2.0,191...

If you look at the results, the x8 results would represent a PCIE 1.1 slot. As you can see, there is almost no performance hit by halving the bandwidth. The problem with this article however is that the 9800 GX2 being used to test represents the flagship card at the time, which is about equivalent to a GTX 460, so I can't say with any real certainty what kind of performance hit a higher end card like a 570 or 6950 would experience, but if we extrapolate I wouldn't expect it to be any higher than 5 fps or so...but again, that's just an educated guess.

EDIT: Remembered an article that wasn't about PCI-Express 1.1 but was rather about the different lane-dividing strategies of motherboard for multi-GPU setups, but it directly applies to your question, you can find it here: http://www.tomshardware.com/reviews/pcie-geforce-gtx-48...

Again, the x8 lanes would represent the PCI-E 1.1 performance. Anyways, this article uses a GTX 480 which is MUCH closer to the kind of performance you'd get with a high-end upgrade...in fact, you shouldn't get much higher unless you go with a 580 (which is still only like a 10% increase) or a multi-GPU setup. Anyways, the only game in the article that demonstrated any real performance difference was Modern Warfare 2, and that was at framerates well above 100 fps for the x8 lanes. So, all that said, I think I can safely say that the performance hit by using a 1.1 interface would be marginal at best, happy upgrading!