You should have listed the model of the processor, but assuming it is a phenom II, it seems to be a great gaming computer for moderate gaming. The Radeon 3100 is an IGP (Integrated Graphics Processor). Though the processor itself cannot be replaced, you can always add an ACTUAL graphics card and computer won't even know it has an IGP. In other words, your computer doesn't have a graphics card and you should get one. I'd recommend any of the radeon 4000 series. I personally like the Radeon 4550, it's great for light to moderate gaming and it can play most new games at low to medium graphics.
This card will most likely fit your needs best for the price ($20 after MIR + free shipping): http://www.newegg.com/Product/Product.aspx?Item=N82E16814121310
This one I recommend: http://www.newegg.com/Product/Product.aspx?Item=N82E16814127458
And this one leaves some room in case you do decide to play some new games, such as crisis: http://www.newegg.com/Product/Product.aspx?Item=N82E16814150450
Non of these are high end cards, and the 4670 is low in the performance class. the other two are economy/budget class. If you want a high end card (Radeon 4890), I'd recommend this one: http://www.newegg.com/Product/Product.aspx?Item=N82E16814150438
still slightly cheaper than the GTX 260... the lower model (the 4870) out performs the GTX 260 in every way, shape, and form; it performs 6% better, uses 32w less power, and is about $15-50 depending on who manufactures the card.
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