Definately upgrade your video card.
512MB is bare minimum. It will work, but you might want more in the future.
Go with 500W PSU, but be sure to get a good brand (ThermalTake, Antec, PC Power, and the like).
Be sure to post your changes and your final.
My Rig: SABLE
Antec 300 Illusion / Antec EarthWatts EA650 650W / EVGA GTX 760 2GB
AMD FX 8320 x8 Black Edition / Gelid Tranquillo / MSI 970A-G43
Sandisk Ultra Plus 128GB / Samsung 840 120GB / WD Black 750GB / WD Green 1TB / WD Red 3TB
G.SKILL Ripjaws 2x2GB DDR3 1600 - Crucial Ballistix Tracer 2x2GB DDR3 1600
Win7 Ult 64-bit - Func MS3 Mouse - CM Storm QuickFire Rapid Mech Keyboard
R.I.P. Danny L. Trotter
... 14 Nov 1945 - 4 Sept 2009