The 7300 is a much better card than the 6600. It has a higher bus speed, and with DDR3 memory, it's much faster. Yes, for all intensive purposes, AGP is SUPPOSEDLY on its way out, BUT I read in a post a few weeks ago that the card manufacturers are going to possibly put out DX10 cards in the AGP format. Whether or not they do remains to be seen since the market strategy at this point is to increase speed and make money. PCI-e is much faster, as it improves speed by anywhere from 50-75%, BUT, most consumers are reluctant to upgrade to a SLI motherboard, let alone have to additionally purchase a new processor (which is the thing to do - forward upgradability as opposed to laterel upgradability), along with higher power supplies and newer DDR 2 RAM. Since the GTX and GTS DX10 cards have hit the market, the price of SLI AND AGP DX9 cards have dropped, but now we're talking about upgrading with close to out of date technology.
As for RAM, 1 gig is fine, but 2 gigs is the standard today due to the requirements of the hardware AND Vista (if you have any inkling on upgrading once the bugs are worked out - like me) will operate on 2 gigs of RAM, up optimally, 4 gigs will be the standard of the future.
You also state that you have a 300 watt psu?? That should also be upgraded to at LEAST a 450 watt power supply with dual rail technology.
As you can see, the $200-300 upgrades of the past are almost nonexistent today. That's not to say you can't do it if you shop around, but it's getting tougher to upgrade and get the performance boost, and future upgradability that you did in the past. The best bet is to look for what's called a Barebones system. Sometimes you can find a really good deal on a case, processor and motherboard. BUT, I warn you that you might as well throw out the power supply that comes with it because it just isn't sufficient.
I hope this has answered some of your questions as well as some you hadn't even thought of.