A 2.1 GHz triple-core Phenom
I is also a limiting factor, easily losing to a decent dual-core... But more than that affects the graphics card, and especially the fact you're running Vista( I assume), and currently only have 1.5 GB of RAM usable for the system, of which about 1 GB goes to the game.
A balanced upgrade could be something like this...
http://www.newegg.com/Product/Produc...82E16817139008 +
http://www.newegg.com/Product/Produc...82E16814161252
And yes, you do need the power supply too, the stock crap-box installed in an Acer won't run any better graphics cards. You could also go up to this, and it wouldn't be that much held back by the CPU:
http://www.newegg.com/Product/Produc...82E16814102822