Your monitor most likely has 1366x 768 or 1440x900 native resolution for which your current card is good enough.If you consider upgrading then get Sapphire HD 4770 512 MB DDR5(7.1k).For this card you will not need to change PSU as it is very energy efficient.Other alternative is HD 4850 which costs less (about 6.5k) and performs slightly better than HD 4770 but will need PSU upgrade.If you want DX 11 card then get Sapphire HD 5670(5.8k).Also consider overclocking your CPU to 3.0Ghz( which your CPU should hit easily.) and adding another 2GB ram.
Why are you guys suggesting HD 5670? From reviews that I’ve read, this card is not that good for gaming. It seems I’m missing something related to this card. Please correct me.
@ OP - I’d say split the budget and upgrade both CPU and GPU. I’d recommend HD 4870 and HD 5770 depending on budget, and CPU upgrade. Both these cards are good enough to play current games in high settings. And should be able to play forthcoming games when run in crossfire mode.
Please note I’m assuming you want to play new games like Far Cry 2, Crysis, Fallout 3, Mass Effect 2 etc on high settings. If you don’t intend to play heavy games, then even HD 4670 can work great.