It's DEFINITELY your videocard bottlenecking the rest of the system. Your processor and RAM are enough to play even the newest of today's games.
If your motherboard has an AGP slot, get a GeForce FX 5900. It's right at $200 and is the best bet for the price. If you want to spend a bit more, I'd try out NewEgg's Sapphire Radeon 9800 Pro for $215. I can't stress how good of a deal this is -- best one I've seen in YEARS.
If you don't have an AGP slot, buy a new motherboard with one. You can get one that supports your processor and RAM for $30 brand new. Then buy the aformentioned videocards.
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For $150 or below, I suggest the GeForce FX 5700 Ultra or the Radeon 9600 XT.
For $100 or below, the GeForce 4 TI4200 is the obvious answer.
Hope this helps!
-Lasereth