$400 is low. What I'd do: go to www.ubid.com and bid on prebuilt manufacturer refurb systems. Try to get something in the $300 range that has a decent CPU (amd x4 or intel i3) and a PCI x16 slot. Get something that is MANUFACTURER warranted for 30-90 days. Do *not* get anything that is 3rd party warranted. Once you get the system add a $90 hd6670 card. The 6670 will run with the existing power supply. That will give you a low end gaming system w/ win7 licence, key, mouse, optical drive, etc.
edit: don't get a small case system (e.g. slimline). Refurbs come in waves, you'll see only 1 or 2 for weeks then a surge of 50 will come it. As you can guess, the larger surges give you best selection and lowest prices. Here are some systems and final bid prices from when i was system hunting in July. You would take a step down in CPU to i3 or x4 and get a lower price point. Hopefully post xmas returns will arrive in a few weeks and give you good selection. Keep bidding, sooner or later you'll win bid. (someone get a steal on the bottom one, $265 for i5-2500 based system!) usual disclaimers - i don't work there, get a kick-back, etc.