I had your exact same setup, more or less, about six years ago. I bought the X2 4800+ the day it came out, $800+ and a year later it was selling for under $200.
To be totally honest, it's not worth enough to upgrade, but you could start buying a few new parts. You could buy a new video card now and use it, but your cpu, mobo and memory will be a bottleneck. It will perform better than what your using but your old parts won't allow it to run at it's potential or even close really.
And you could buy a new power supply and use it now and later.
Then you would just need to save some cash and start watching the Newegg Combo Deals for a cpu, mobo & memory.
Either one of these would be a good sub-$200 video card.
Newegg.com - XFX HD-685X-ZNBC Radeon HD 6850 Black Edition 1GB 256-bit DDR5 PCI Express 2.1 x16 HDCP Ready CrossFireX Support Video Card
Newegg.com - EVGA 01G-P3-1380-KR GeForce GTX 460 (Fermi) SSC+ 1GB 256-bit GDDR5 PCI Express 2.0 x16 HDCP Ready SLI Support Video Card
This is a great price after a rebate and free shipping. You could buy a smaller power supply but a good one would be almost as much, within $10-$15.
Newegg.com - CORSAIR Enthusiast Series CMPSU-650TX 650W ATX12V / EPS12V SLI Ready CrossFire Ready 80 PLUS Certified Active PFC Compatible with Core i7 Power Supply
If you think you might go SLI or CrossFireX later you'll need an even bigger power supply. I would say this is the minimum for (2) of either of the video cards I listed above.
Newegg.com - CORSAIR CMPSU-750TX 750W ATX12V / EPS12V SLI Ready CrossFire Ready 80 PLUS Certified Active PFC Compatible with Core i7 Power Supply