Your card is quite old, for comparison the ancient consoles, like the ps3 for example uses a version of the 7800gt, so you arent much better off than those stone age things. You are lookin at quite a few generations since then of new tech. I'm honestly not an expert on AMD cpu's in that range that yours is in, but goin too big on a new card could cause you to be limited by an older cpu, just keep that in mind.
But in short, yeah a new vid card would help alot, as well as the obvious memory upgrade. Having said that, dont go too nutz on the card unless you plan to upgrade the rest of the system not too far down the road. The upgrade from DX 10 to 11 isnt that big of a deal graphics wise, esp if you dont have a higher end card to pump out that tesselation. However just the upgrade to somethin more powerful could make a rather big difference in not just your FPS, but also how many other effects you can turn on with more power.
I may be partial to nvidia in the current gen for the types of games i play, so a 560ti is a solid card thats still moderately priced and shouldnt be too much for your system.