1) PCI Express. Agp is dead.
2) Go Intel (conroe). Get the e6300 for under 250.
3)$500 is a LOT for a video card. You can get a 7950GX2 [best card out there] with that
If you go conroe, you will need a conroe-compatible mobo. There are few out and all of them are too expensive. Wait a while for more companies to enter the fray and drop the price. Second, you will need two gigs of DDR2 ram with that conroe. I highly recommend OCZ DDR2-800 [under 200].
PM me if you have questions.
EDIT: Whoopsy. Is $500 your total budget??