How do I improve my PC's performance?

This is my pc spec:

Processor- AMD Athlon II x2 240 (2x 2.9 MHz)

RAM- 2x 1GB DDR3

Graphics Card- ATI Radeon 4550

360GB hard drive

Windows 7

It runs okay, but with some games, I have to go down to medium or even low graphics for decent performance. I was wondering what I should upgrade? I ran the Windows Experience Index and it said my processor, RAM, gaming graphics and hard disk are all about 6, but my Graphics is 4.8. Should I get a better graphics card, and if so what sort of thing should I get? Thanks.

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