Yeah your PSU needs upgraded as well. I wouldnt go with a 9600 IMO they are cheap yes but you get a boost in performance with a 9800GT and its only like $20 more. Or you could go with ATI HD4850 for a little bit more. At that point its about preference. Do you prefer ATI or NVIDIA? I think (don't quote me on this) the 4850 puts out more perfermance than the 9800GT however it also runs hotter. (If your case is well circulated it won't matter much) I have a 4850 and I love it. I can play crysis on all high, far cry 2 on all high, fallout 3 on ultra etc.I have also heard good things from the 9800GT's as well.
For your PSU you are going to want to make sure that you have enough wattage to run your new GPU. I would recommend 700W or higher just to be absolutely positive.
Something like this would do just fine
http://www.newegg.com/Product/Product.aspx?Item=N82E16817703009
Your looking at around $150 for a PSU and around $150 for a GPU. The price will change depending on which manufacturer you go with but thats a pretty good look at what your final total will be at. Make sure you check newegg and tigerdirect for deals and you might be able to find a GPU/PSU bundle or something like that. It never hurts to shop around.
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