Darth Sea Bass said:
I'm starting to get the impression this machines a lost cause. :/ Knew it had to happen eventually.
No, it's ok. At your resolution and budget, an HD 5770 or GTX 460 768mb are good choices. You'll need around a good 400W PSU like a Corsair 430CX. If you can open your system up, can you tell us what PSU is in there exactly? Brand + wattage.
You already have 4 gigs of RAM and Win 7 64 bit. Your CPU is a tad slow, for around $75 you could most likely upgrade to an E6600 3.06ghz dual core. Otherwise the only other upgrade I'd consider is a new HDD like a Western Digital Black Caviar or Samsung Spinpoint F3, or for a little cheaper/slower (but good quality and quiet) Seagate Barracuda.
Actually, looks like you have a decent mobo, I wouldn't be surprised if you can overclock with it. In that case, a cheap $30 heat sink can allow you to hit over 3ghz pretty easily and IMO with a midrange GPU like I mentioned, your system will play games just fine.
(FYI, I guarantee I know at least as much if not more about building PCs as anybody else here. I can tell you some people have already given you some silly advice like suggesting you need a new CPU, mobo, and RAM... let's call those things a "future upgrade" because just baseline cost is going to be ~$250 just for those 3 things)
Take your time with upgrade. Get the GPU and maybe PSU now. Maybe get a fast HDD. Then maybe a case with good airflow (~$50 for Antec 300). Then you might consider spending the cash to really bump you up to modern specs with new hardware. Low end idea would be an i3 2100 CPU, P67 mobo (to allow upgrading to an i5 2500k or i7 2600k with overclocking) and 8 gigs of DDR3 RAM. Or just go straight to the i5, which will be a good CPU for many years to come.