A DX Diag. report would be useful, with any luck you may be able to upgrade without replacing so much.
Hopefully this is the DxDiag report you mentioned...
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System Information
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Time of this report: 8/3/2009, 11:56:28
Operating System: Windows XP Professional (5.1, Build 2600) Service Pack 3 (2600.xpsp_sp3_gdr.090206-1234)
Language: English (Regional Setting: English)
System Manufacturer: To Be Filled By O.E.M.
System Model: To Be Filled By O.E.M.
BIOS: BIOS Date: 09/05/05 16:00:33 Ver: 08.00.09
Processor: Intel(R) Celeron(R) CPU 3.06GHz
Memory: 2048MB RAM
Page File: 484MB used, 3458MB available
Windows Dir: C:\WINDOWS
DirectX Version: DirectX 9.0c (4.09.0000.0904)
DX Setup Parameters: Not found
DxDiag Version: 5.03.2600.5512 32bit Unicode
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DxDiag Notes
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DirectX Files Tab: No problems found.
Display Tab 1: No problems found.
Sound Tab 1: The file ctaud2k.sys is not digitally signed, which means that it has not been tested by Microsoft's Windows Hardware Quality Labs (WHQL). You may be able to get a WHQL logo'd driver from the hardware manufacturer.
Sound Tab 2: No problems found.
Music Tab: No problems found.
Input Tab: No problems found.
Network Tab: No problems found.
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DirectX Debug Levels
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Direct3D: 0/4 (n/a)
DirectDraw: 0/4 (retail)
DirectInput: 0/5 (n/a)
DirectMusic: 0/5 (n/a)
DirectPlay: 0/9 (retail)
DirectSound: 0/5 (retail)
DirectShow: 0/6 (retail)
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Display Devices
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Card name: NVIDIA GeForce 7600 GS
Manufacturer: NVIDIA
Chip type: GeForce 7600 GS
DAC type: Integrated RAMDAC