World of Warcraft might be an option, it runs on low end PC's smoothly.
Give the 14 day free trail a try ;)

$200 isn't a lot, not a bad deal for a PC, I'd recommend like others have said to upgrade your RAM. That is the cheapest thing you can buy that will give you the most bang for your buck

also try HoN (Heroes of Newerth) very addicting game in the style of DotA from WC3 days, it is still in beta until the 17th or so, after that you need to buy it $30 - so pretty cheap

As well as Steam, take a look at gog.com- loads of cracking old games for cheap.

Who the hell would buy a case that cool for a PC that bad? <.< Anyway, try to upgrade the GPU as soon as possible and hope that the interface is PCIE and not AGP. Depending on the CPU slot, you might be able to upgrade it as well, but not by much.

All games bought through Steam have DRM. It is not terribly bad, or invasive but it absolutely is there.

@OP:
With my previous PC, an Athlon 2200+ (still an old 32bit one), 768MB RAM and Radeon 9250, I was able to play Gothic and Half-Life at max detail and 1024x768 res with almost no problems, while at the same res both Morrowind and Thief III had some hiccups in the most complex scenes, but I used Windows 2000, that ate less than 200MB with firewall and antivirus running and some services disabled. Your graphics card is more than twice as powerful as my old one, your CPU 40-50% faster, but if you have XP on it it should eat more RAM, so upgrading it to 2GB is quite necessary.
For the GPU you can get an overall idea here: http://www.tomshardware.com/reviews/gaming-graphics-card-geforce-gtx-480,2598-6.html
For the CPU, a 3200+ single core should be enough for old games, if the mobo is old I wouldn't waste money for ultrafast CPUs.
On my new PC I mounted an Athlon X2 5050e, an energy saving version, it requires only 45W, 20-30 less than my older and slower CPU, it's quite faster and powerful enough for games up to 2-3 years old at high settings, while it should run also most of the newer ones at lower settings.

Errr...no they don't.

Unless you're noting the fact that Steam itself is DRM in which you'd be correct. :P

The radeon X300 was a PCI-E version of the Radeon 9600. Simply and obviously terrible! However you can get a Radeon 5670 or 4670 for a pittance and install that and you'll be able to squeeze some modern gaming out of it.

http://www.newegg.com/Product/Product.aspx?Item=N82E16814161319&cm_re=hd_5670-_-14-161-319-_-Product

$93 incl shipping

Do it!

Pretty much. Since the game can't run without Steam the usage restrictions around Steam act as DRM for any and all games. Of course requiring that you connect to their servers every few days, and not allowing you to log in from two places at the same time is hardly a nightmare of usage restrictions.