Grab another (identical spec) 2Gb Ram Chip, and an ATI radeon 6670 card - $130 total? - should do you fine. I played Skyrim on an integrated Intel 3000 chip until I got cards, fine on medium detail at a low resolution.
The PSU is your power supply unit. If 650W is correct, it's got headroom for a bigger gfx card.
You can spend more, and certainly up to your $200 budget, but I would try to scrape by and save the rest, as you really need to go for a bigger upgrade in the future. Getting the above will get you through 6 months of skyrim