Worth it to get a better PSU and ATI card or is there a cap where getting higher and higher end Radeon cards stops mattering for my CPU?

Would it be worth it to get a better power supply and better graphics card or is there a cap where getting higher and higher graphics cards doesn't make a difference for my Intel 945G Express chipset and Intel Pentium D CPUs (3.20 GHZ (2 CPUs with 5x1 and 6xx Series Processors)).

I have a Dell Dimension E510 and I can't afford to be buying a new computer or building one from scratch.

 

Depends. A Pentium D is a sufficiently slow CPU to bottleneck almost any graphics card you buy. It depends what you need the PC to do. No need for a $300 high-end card if you'll only be playing basic games, but equally you'll still find situations where your old graphics card may be a limiting factor, but not the CPU. The most it's probably worth upgrading to for that system is perhaps an HD6670 or so. Anything beyond is going to be a bit of a waste without upgrading the CPU.