PCI Graphic card upgrade...?

Hello,
I just bought Sims 3 last night., and i download it and a pop up came up & says:

"Device 0 cannot run this title, your video card does not appear to support at least a shader model 2, please upgrade your card"

I know I need a new Graphic Card, & I need a PCI one.
I don't know quite where to buy a good graphic card, & don't know how to tell if
it is shader model 2?

This is information on my computer:

Microsoft Windows Xp
Home edition
Version 2002
Service pack 2

Registered To:

55277-OEM-0011903-00106

Manufactured & supported by:
Hewlett-Packard
Pavilion
Intel (R)
Pentium (R) 4 CPU 2.60 GHz
2.59 GHz, 504 MB of ram.

--------------------------------


I know I need to get more memory, but I'm more worried about the graphic card
as this point. The requirements for sims 3 is:
CPU: (XP) 2.0 GHz P4 Processor or equivalent.
RAM: (XP) 1 GB RAM
Hard Drive: 6.1 GF of hard drive space with at least 1 GB of additional space for
custum content and saved games.
Video: DirectX 9.0c compatible.

How do I make more hard drive & memory space also? Thanks in advance.