I have a Gigabyte 2AC8. (2.0, 3.0 question)

yes it will work... at 2.0 speed of course. but that is no handicap as no card yet made can saturate the v2.0 slots at x16 bandwidth.

Thank you for your reply, I will be buying the 7870  

Make sure you PSU is capable of that card. The HD 7870 requires 161W at max demand. That relates to about 13.4A on the +12V rail.

Yeah I was planning on buying a new PSU at the same time since I currently have a 300w power supply. I was going to buy a 700w power supply but would you recommend any good ones that are < $100?

Here is all Newegg has at 700W and between $75 - $100 listed in order of best ratings:
http://www.newegg.com/Product/ProductList.aspx?Submit=E...

If you can spend a bit more, I would recommend an Corsair. This one is only a little more than your limit.
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

The better brands are Corsair, Seasonic, XFX, and some Rosewills. You really are over doing it with a 700W since you can't add a 2nd graphics card to that board. Any 600W - 650W would be more than enough.