PCI-E v1 compatibility question

I have an old Abit IP35 Pro motherboard which I bought before PCI-E 2.0 came out and would like to upgrade my graphics card. I have my eyes on the Asus GTX 460 but I'm concerned that there will be a compatibility problem with my older motherboard. I cannot currently afford to upgrade my computer, but after going to 1920x1080 my 8800GT's lack of memory is starting to show through and it would be nice to pick up a more powerful (and hopefully more power efficient) GPU while I'm at it.

My system:
Abit IP35 Pro
Q6600 @ 3.2GHz
MSI 8800GT @ 740/1850 GPU 1025 Memory
4GB G. Skill DDR2 800
Thermaltake Toughpower 700W

I mostly play Left 4 Dead 2, Mafia 2, and Starcraft 2 and may be picking up Metro 2033 in a few weeks. The 8800GT doesn't do too bad, I've tweaked with most of the graphics settings to the point it's running playable FPS and decent quality but my friend's Radeon 4670 with 1GB of RAM and the same monitor seems to play everything smoother. I just want to know what kind of issues I may run into by going to a new card while on the older interface.

I've gotten a lot of conflicting information about compatibility. Some say v2.0 will step down to a 1.0, others say it needs to be a 1.1 slot to work properly, some say nothing will work, and others say it needs a BIOS update to work right and even then some cards won't work. I did have a GT 430 in it for a short bit and that worked just fine, would I have any issues with something like the GTX 460?