Haha ya I would not buy a gig of RAM for only 50 bucks. Think about it bro: there is a reason why it is only 50 bucks!
As for your video card, Liuliuboy is right. Check out the 6800GS line (very popular now-a-days for it good performance/cost ratio). I have not checked out the mid-range ATi cards because everyone recommends the 6800GS way too much on this forum!