Most people will tell you, it's typically true that the more you spend on a graphics card, the better gaming experience you'll get. How much you need to spend depends on a) the games you want to play, and b) whether you have one or two screens, and the resolution of those screens, and c) what's 'acceptable' to you in terms of framerates, detail and so on.
That said: your system is a little limited in its ability to get the most out of an expensive graphics card. Many modern games can take advantage of a quad core processor, for example, and without, the graphics card doesn't reach its full potential. Only 2MB of memory won't help, either. And: don't overlook the fact that, with a more powerful graphics card, you'll also need a decent/higher wattage power supply.
If you can be more specific about what games you have in mind, what monitor(s) you plan to use at what resolution and what your tolerance is for detail/framerates, the forum can probably advise in more detail.