You'll need at least 1.5GB of RAM to play the latest games. Ignore the fact that your onboard video is ATI. Go for something like an NVIDIA GeForce 8800GT. Don't forget to buy a quality power supply capable of 26A on the +12V rail in order to run it:
Power Supply Information and Selection
Unfortunately your motherboard doesn't support CrossFire nor SLI since it only has a single PCI-E X16 slot.