I will be mostly playing FPS games. May play other games too like Crysis 2, call of duty, Assassins Creed.
Currently I'll be playing at the resolution : 1024x768. Most probably I will also be changing my monitor to 21" or 22" monitor, so will be playing games at higher resolutions too.
I can spend upto $200 for the graphic card. BTW my motherboard only supports crossfireX (AMD quadcore crossfireX). So will be needing the card so that later I can use it in crossfirex configuration with another graphic card.
And do suggest a good PSU
I would get at least 600-650 PSU, and Radeon 5770. if your psu its too weak later on you have to get a new one and the old one wiil be sitting in your closet. Graphics card you can keep and later add another one for better performance. 5770/6770 (same thing) will run anything you throw at it and it cost $100 if you get it on sale.