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I'd recommend a new case & new 500W PSU as well as a GPU. The GTX 750 ti is the best card that can run on 300W currently.
For under $500 you could build a whole new system that would be all-around better.
GTX 750 ti that runs on a 300W PSU which you hopefully at least have. You still need to check if it fits your case.
http://pcpartpicker.com/part/evga-video-card-02gp43751kr
Option 2:
New case (needed to fit PSU), new PSU and new GPU. This GPU sucks more power than the GTX 750 ti by almost double and it's also cheaper but by the stats (GFLOPS, memory bandwidth and fillrates) it's also better.
http://pcpartpicker.com/p/7CNZjX
Base Total: $199.97
Mail-in Rebates: -$55.00
Total: $144.97
Option 3:
Whole new build:
"Gamebox" budget PS4/XB1 console replacement PC. Version 2
http://pcpartpicker.com/user/Rove/saved/WmdG3C
Base Total: $521.81
Promo Discounts: -$10.00
Mail-in Rebates: -$60.00
Shipping: $2.98
Total: $454.79
SO between all these it depends what PSU you have got right now and what's on budget for the future. Do you want the bare minimum, the solid upgrade kit to help continuely upgrade the PC over time perhaps next with a new motherboard, CPU and RAM or the whole new tower?
You can build a decent pc for around 500$ (around 400$ not including windows, if you are willing to go for free linux).
I just ran Unigine Valley benchmark (in Linux) with my Dell XPS 8100 i5 650 3.2 GHz, 8 GB, GTX 550 Ti (116 watt) and it peaked at 206 watts at wall outlet (Kill A Watt meter). With 750 Ti that would be 150 watts total for my setup (maybe less with his CPU). Although, my OEM PSU is 350 watt.
But that might depend upon the quality of his replacement PSU. I once had an HP computer from 2004 whose overrated OEM 250 watt PSU could not even boot a mild video upgrade that only used 130 watts at the wall (after upgrading to 330 watt PSU). Although, Dell PSU's may more conservatively rated to provide their rated power.
PS: One thing I just learned is that for computers before 2012 you might need UEFI capable BIOS for GTX 750 Ti and not sure what other cards might require that. The newest BIOS for my computer is dated 2010. So I still need to research that.
You can try using something like this:
http://www.systemrequirementslab.com/cyri
It scans your specs and compares to games and says what exactly you are missing. But it's pretty obvious that the gpu is all you need.
But your graphics card is so old and terrible, it's unlikely it will run anything decent. Even the cheapest laptops these days come with more powerfull integrated graphics, but even they can barely run games on lowest graphics, and still not all of them.
But its great and silent.
As far as the BIOS thing I was not certain of above, this MSI has a tiny switch that by default is set to (2) UEFI/BIOS Hybrid (not sure if that automatically works with old BIOS), but I set it to (1) Legacy BIOS and it works in Win7 and Linux. Although, I had to update the Nvidia driver in Windows. It uses about 50 watts less than my GTX 550 Ti (not much over 150 watts max for entire PC) while being faster in benchmarks.
Here are a few:
GTX 750 Ti (Mini / ITX version)
http://www.newegg.com/Product/Product.aspx?Item=N82E16814127784
http://www.newegg.com/Product/Product.aspx?Item=N82E16814487025
GTX 970 (Mini / ITX version)
http://www.newegg.com/Product/Product.aspx?Item=N82E16814125706
This site may not be perfect in my opinoin but it's okay and at least covers most options. I think they should recommend a bit more RAM then they do and place AMD CPUs too low in some cases and CPUs like the i3 too high. Also think AMD GPUs deserve a higher spot. Though I am a AMD fan.
http://www.logicalincrements.com/
similar core performance, and most game do not need over 4 cores anyway
he would save alot just getting a low profile gtx750
if he wants a new build, an i3 would be a step forward, with upgrade optinos to i5/i7 if/when needed
logicalincrements is a good site for general computing, but for gaming their gpu/cpu choices are way off