At 1024x768 you won't benefit from a new graphics card, I'll tell you that much.
I'd get a new CPU and a new power supply, and move to 2x2 GB of RAM if possible.
For CPU, E7400 or E8400 are good for the price. Unfortunately you can't get a quad for under $200, and even if you did, you should still get a new PSU. Something from Corsair, SeaSonic, FSP, OCZ, or PC Power & Cooling. Doesn't need to be high wattage but most "generic" power supplies are pretty bad, especially if you're overclocking.