Radeon 4870 $120 Budget

The HD6850 is roughly 30-35% faster than the HD4870 on average at high resolutions. It will also give you DX11 and much improved power efficiency. Whether it is worth the money you need to decide I guess. Personally I would recommend at least saving up slightly more for an HD6870 which would be closer to a 60% increase in performance. Here is one for $140 after rebate with a free game you could ebay to get closer to the $120 you were talking about;
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
FYI your processor runs at 2.13ghz which is quite low these days even for a quad core. Many games still just use 2 cores and especially in those it is going to restrict the performance of any card you might buy(probably already an issue if you are running an HD4870 at 1440x900.) I would overclock that processor as much as you can. A decent cooler is $20-30 if you are still on the stock one. With good cooling you should be able to get it up somewhere in the 3-3.5ghz range which would help a lot.
For the monitor this is a good page to keep an eye on;
http://www.logicbuy.com/categorydeals/computers/lcd-mon...