OK, your processor and Ram are more than enough.
The Nvidia 8600 range seem very good value for money. Seen them at less than 50 pounds e.g. here:
www.novatech.co.uk
The 8800 has the edge, but frankly you won't see any difference in S08, and they cost a bit more.
But, I would suggest finding out what card you have, as it may already be good enough. Easiest way is to post your DXdiag report here so that I can take a look and see what's what.
Here is how to upload your DXdiag results:
Click Start button. Select "Run". Type "dxdiag" and press "Enter".
You might be asked about WHQL drivers, click "Ok".
In the next window click the button that says "Save All Information", when the Save Dialog box appears, save the file to your desktop.
To upload the file here, select "Reply" to this message. Select "Additional Options" (underneath the text area)and choose "Browse". Browse to your desktop, click the file and click "Open". When finished post the message.