I've recently upgraded my graphics card from a Radeon 8500 to a Radeon 9800 Pro...as far as surfing and email goes...absolutely no difference what so ever.Games are a different story altogether...i can now run Medal of Honour.Allied Assault at 1600x1200 with all the goodies turned on and still get good framerates...so to put it in a nutshell..for normal windows operation...no difference...for games...a vast difference As you rarely play games unless the difference between an analogue and digital input to your monitor are considerable it hardly seems worth upgrading As far as photo manipulation goes...not having been involved in that but reading these forums regularily i would have thought more memory would be a better upgrade for you as the files can be quite large. i'm sure people far more knowledgeable than me will soon give you a definitive answer to your question but thats my best guess
The main thing about the TFT you have is that the picture quality will be better with a DVI cable. You do not have to go over the top as far as graphic cards are concerned, as long as it has a DVI connection you will get a better picture. Buy one of the lower end cards, it doesn't have to be fast or expensive. I've got the same monitor as you and I can assure you it is better with a DVI cable attached.