I would suggest first just getting a video card and power supply.

If you do not intend to change your monitor, I would look to a NVIDIA GTX 460 or Radeon 6790 which can be had for ~$140-150.
The next step up would be either a NVIDIA GTX 560 or Radeon 6870 ~$180.

Sure, the GTX 560 Ti is a great card, but if money is a concern, you can get by with less.
The GTX 460 (or equivalent) is actually in the Recommended System Specifications running a screen resolution of 720p.