You will definately need a new(and more powerful) PSU, at least 400 Watts from a good brand(Corsair, Seasonic, XFX, PCP&C, Antec). A good rule of thumb: expect to pay around 10 cents per watt for a good PSU anything less(unless on sale) only gets you junk.
What resolution will you be using to game? for 1920x1080 (or lower) go with the GDDR5, for higher resolutions the 2 gb extra memory would be more useful than GDDR5.
Should should I go for the GDDR5? Does that mean that it will run smoother than the 2 GB one at lower resolutions?
I don't think that you would notice that much of a difference at that resolution. Its just that at that resolution, you wouldn't be using(or needing) 2 GB of Vram. If you anticipate getting a higher resolution monitor, then you might want to get the 2 GB card, just for future use. Are the cards the same price? If not, then I would say go with the less expensive one.