Well 250W is going to be the main problem..
Every card I see that's of the newer generations require at least 450W and reccomend more,
and usually they require 2 4-pin molex connectors as well (those power cords inside the case going to everything)

We need more info tho,
Mainly does your board support AGP or PCIe

Summary:

Current
Athlon X2 64 2.0GHz
Corsair DDR2 400 2GB
GeForce 7800 GTX

Upgrade
Core 2 Duo 2.4GHz
DDR2 1066 2GB (or 4GB now that I'm on Vista?)
-or-
GeForce 8800 GT

Long version:

Just got my stmulus check, going to use it to upgrade.
Had a previous discussion on here that lead to everyone suggesting to upgrade my GPU
above anything else in terms of gaming performance increase.

I built a new Athlonx X2 system for a friend over the weekend and he had DDR2800 in it
and the resulting speed was substanial compared to my current machine.

After some research I've decided on the above specs for potentional upgrades but I can
only afford one or the other.

I realize the system upgrade would yield the best overall results but..

Which would give the best increase to gaming performance?

I'm worried my system would bottleneck due to my DDR400 RAM and I wouldn't get a
performance increase just by upgrading the GPU.. but I just installed Vista and I'm wanting
to get a Dx10 card ASAP.'

If I decide to get the GPU I'll be getting some more fans and a better heatsink and begin
to overclock the rest of my system to try and compensate.

I'm planning on upgrading my PC with my stimulus check.
I really don't feel my whole system needs an upgrade but it seems like I'm hitting
a bottleneck somewhere with these newer games.

I've been told get a new CPU, I've been told get a new graphics card, and now
I'd like your opinions.

Quick Stats:

Athlon 64 X2 3800+
2gig dual-channel
Geforce 7800 GTX OC
SATA 2.0 HD
Win XP

Advanced Specs:

AMD Athlon 64-bit dual core 3800+ @ 2050.05 MHz (1MB L2, ave 36c temp)
2GB Corsair DDR-SDRAM PC3200 (200 MHz) DDR400
GeForce 7800 GTX OC (current WHQL drivers, 256MB GDDR3)
nForce4 Mobo
Audigy sound, NIC installed (not using onboard)
Windows XP SP2
(all drivers up to date, minimal background processes running at all times,
HD always defragged, using pagefile)

EDIT (in response to first reply):
Another thing I've been curious about..
If I am to upgrade the GPU should I go with say an 8800 or a 9600?
They're both around 150$ give or take