This PC was recently given to me, and I'm looking to upgrade it (for say max. 100$) so I can play Oblivion. See specs below.

So I'm looking at:

1) Obviously a video card (used or refurbished), preferably one that will enable me to play modded Oblivion on high / very high quality settings. My monitor's max resolution is 1280x1024. If possible I'd like to give Skyrim a try as well, but that's of secondary importance.

2) An extra 2GB RAM upgrade. Question is whether this is necessary for Oblivion at all. I'm guessing I want this either way.

3) I have some (pretty basic) experience with overclocking. With the below specs, will it help improve Oblivion's performance significantly if I got it to 3+ Ghz?

4) Will it improve Oblivion's performance if I create a Windows XP partition and run it on (32-bit) XP instead of 64-bit Windows 7?

Thank you in advance for your reply!

--

Computer
Model : Fujitsu Siemens ESPRIMO P5720
Mainboard : Fujitsu Siemens D2581-A1
Bus(es) : X-Bus PCI PCIe IMB USB i2c/SMBus
Total Memory : 2GB DIMM DDR2
Processor : Intel® Core™2 Duo CPU E7300 @ 2.66GHz (2C 2.66GHz, 3MB L2)
Memory Controller : Fujitsu Siemens Q33 Processor to I/O Controller 4x 266MHz (1GHz) FSB, 2GB DIMM DDR2 2x 399MHz (798MHz), Integrated Graphics
Memory Module : Hynix (Hyundai) HYMP125U64CP8-S6 2GB DIMM DDR2 PC2-6400U DDR2-800 (5-6-6-18 3-24-6-3)
Video Adapter : Intel® Q33 Express Chipset Family (PS2.0, Integrated Graphics)

Operating System
Windows System : Microsoft Windows 7 Ultimate 6.01.7601 (Service Pack 1)
Platform Compliance : x64