for your budget you could get one of the nvidia ti4200`s or a radeon 9500 maybe.both will be a lot more capable than your present card.
direct x8.0 cards will work with direct x9.0 as its backwards compatable.you will need version 9.0 for some games to run properly now,an example is gta vice city,freelancer and cmr rally 3.your present card will struggle to play these games though.
even signed drivers can cause problems too.click here for the latest signed driver.
be sure to remove the old drivers before installing new ones.click here and run this after uninstalling the old driver via add remove programs.then install the new one.
update windows too.