Yes it probably can but it will depend on the graphics card in question. As in what are the power requirements of the card you are looking at. The CPU could end up bottlenecking the GPU, but of course this is dependent on what GPU you are going for.
No worries, anyway according to AMD a 450W or higher power supply is needed for the card to run in your system. So I'd say a 500W PSU, bung it into your system and off you go.
In terms of bottlenecking with that CPU I don't really know. I suppose you may see a little drop in performance but all in all I think that CPU would be fine with a 4850. If you were comfortable you could even overclock your CPU a little more just to get that little extra drop of performance.
With other components in it, the whole computer pulls 251w at load. You would definitely be OK, although a new PSU should be the next thing on your list.
And your CPU shouldn't be a bottleneck except at low resolutions.
that review is with a 130 watt Core 2 Quad QX6850 in the test system and the OP's E7200 is 65 watts. i doubt that there will be a 65 watt difference but you could realistically expect it to not go beyond 225 watts.
If it's for skyrim, definitely! $40 and you can play on better than console settings. At 1440x900, my friend has a 4650 and plays on high with 2xAA. He wouldnt let me install fraps to see exactly how many fps he was getting, but it looked smooth enough. Unless you have a 1080p monitor this upgrade will definitely be worth it. And that processor is actually pretty decent so don't underrate it. Get it and have fun!