Ok, it seems you need some help from a professional

- just kidding.
It is correct that the video card is THE bottleneck in most new games (games released in the last 1 or 2 years). So if you can couple your existing system with a good card, then you should be able to play them significantly better. For example, a AMD K6-2 500MHz with 32MB Rage128 Pro is not that bad compared to a P4 3GHz with that card, when it comes to gaming. Both perform pretty much the same. So if you need to unleash the power of the P4, you need a far better card.
But....
Video cards are most difficult to find computer devices in Sri Lanka. Either they are about 100% over priced, or they are not imported at all. I have a Radeon 9600 Pro and it's fine for normal people (by far) but is a total junk card compared to even the previous card I had (R9700Pro - it burnt

)
I can play NFSMW only at 800x600 with 2x AA but with most of the settings turned to max. This pile of crap can't overclock either. Those games mentioned by Mushain are very old (except NFSMW, but it also is close to a year old now). For the record, this card only scored 400 odd 3dMark06 marks. The highend cards score around 5000 or even 7000. Ultra highend cards (configurations) will score close to 15000 marks.
Stay away from Geforce6 6800x cards because they are power hungry bastards. But if they are cheap (still 4 or 5 times expensive than what spindoct is looking at), go for them. You can still play games pretty well (maybe not at full eye candy) with them.
Those cards that fall under Rs.7000 are not even considered as poor man's cards (i.e. not even entry level cards). Mine falls under that too. If you are looking at class 1 cards, well, they costs usually US$1300 (without tax) That's Rs.130,000 or more. Those are the quad SLI configurations with a whopping 2GB frame buffer!!!
You need at least a Geforce 7600GS or Radeon X1600XT card to play (modern) games. Those retail at around US$130-180.
And 512MB RAM is so ancient! If you really need to play games, you need 1GB RAM. Remember, the upcomming games such as Crysis, Unreal Tournament 2007 etc require a minimum of 768MB RAM to play. 1.5GB is the recommended for them. You need at least 2GB of RAM to play them at full glory, without random pauses (paging???).
So if you are not gonna spend at least Rs.10,000 on a video card, then don't bother playing games, or try to live with onboard video, because it will just make you heart broken when your new Rs.7000 card can't handle most of the games. I don't play much games anymore because of it.
For anyone going for the ultra highend segment, it's better to stick with nVidia because their dual chip 7950 consumes less power than a single Radeon X1900XTX card, and usually performs better. If you go for ATI, you will need a mosnter of a Power Supply Unit (nothing less than 500W)