Personally I would go with the new core 2's that came out. Dual core is going to be mainstream in the next couple years (IE everything is going to support it) and these processors are just plain nice.
Second, a new motherboard is going to be needed to support this.
The 2 gigs of ram will be plenty as are the other hardware besides the vid card. I'm not familiar with that card off the top of my head, but what I suggest you do is go to
www.anandtech.com and check out their video card section. It's a great place to find cards that are great but not necissarily that most expensive. And if you do pick up the new core 2's, dont go with the top one, the mid ones are just fine and much cheaper. (Make sure it's a 4meg not a 2 meg though)