You did not specify a budget, so I put up the list not knowing how much you wanted to spend. Yes, you can use ATI graphics cards on NVidia chipsets. Which vendor you use should be a consideration if you choose to use SLI or Crossfire, neither of which your motherboard supports. With your current processor, you will be bottlenecking your GPU if you get a new one. The CPU cannot send information fast enough to the GPU. Most current games run best with multiple cores, especially when the clock speed is higher than the one you have. If the one above is too much, you can get the AMD Athlon 64 X2 5000
which is about $30 less. I also don't know what wattage your power supply is, so my suggestion there remains the same. In order to write DVD's, you would have to get a new drive. Almost any will work, but I suggest Lite-on drives.
Here is a revised update list:
CPU: AMD Athlon 64 X2 5000 - The 6000 model I listed above is the fastest your motherboard supports. The 5000 is still much more powerful than what you have now since its clock speed is 500MHz faster and is dual core. $55
RAM: OCZ Platinum 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 1066 - This is the 2GB version that is listed above. The 1066 memory is faster than the 800 and will give better performance. Non-ECC memory is preferred with this PC. $36
GPU: Galaxy 95TFE8HUFEXX GeForce 9500 GT
- The 9500 GT series has more stream processors and a higher clock speed than the 9400 GT, as you can see in the graph above. There is currently a $20 rebate going on for this card. This card requires a 350W power supply. $54
PSU: Your current wattage is unknown, so I can only make general suggestions here. Corsair, Seasonic, and Silverstone make some very good PSU's, if you're looking into getting a new one.
UPS: I don't even have one of these, but then again I'm sitting in downtown Brooklyn where the power very rarely goes down. Most home users do not need this as they only provide about ten minutes worth of power, unless you have a critical web server running, this is largely an unnecessary expense. If you're wanting something that will clean up the power coming into your home, you can get high quality surge protectors which can normalize the power before it hits the computer.
You don't need EPP or ECC for your RAM. Both of these technologies will increase the price of the RAM. However, SLI-ready memory does have EPP which will make overclocking easier. If you see yourself doing this, EPP can be useful. It is included with the RAM I chose, but you can get almost any DDR2-1066 pair of sticks and they will work fine without it. You also don't want ECC since it will slow down your memory, if you're a gamer, this isn't helpful.