That's a socket 775, it should already be a PCIe graphics card, right?
Besides the fact that this system is quite ancient, you could go with a more recent graphics card, something like a HD 6850/6870. Faster cards don't make much sense, given the age of the other components and your budget range. You can also take the card along into a new system once you have the money. So that's your best bet.
BTW, why "upgrade" a PSU? There's no performance gain in this. Was the old one broken?
Yep,it is PCIe
My old PSU was causing random crashes and BSODs ...thats taken care of,atleast for now.