Best GPU in that price range is the HD7770. Its power draw is tiny so it shouldnt pose a problem with your PSU.
Sapphire HD7770. $150http://www.newegg.com/Product/Product.aspx?Item=N82E16814102993
That should play games much better than the GTX210 (I think thats the oldest card that is still available trough mainstream means). At that resolution it will perform quite well.
Though most likely if you get any stronger graphics cards (maybe already), the CPU will bottleneck it without doubt. Quite simply, that old dual core wont be able to keep up with that card, and performance wont improve.
And if you want it, here's my recommendation for a cheap platform upgrade. An AMD Phenom II x4 965 and an AsRock 970 Pro3 motherboard (~$180 estimate). That will be better than those old Intel CPU's and will give you an easy upgrade path to Bulldozer and Piledriver CPU's.