a graphics card is for showing content on the screen. It can speed up redraw, but not performance.
normally, for photoshop 128 should be enough. One thing though: is it a separate card orpart of the mainboard? In the latter case, it eats from your RAM.

And this is from my point of view the weaker point: if you're on a windows system and running XP, you can go to a maximum of 2GB ram. To get more, you need a 64bit win version. Otoh: 1gig isn't much, even less if the graphics card is included, and win itself is already eating a good part of that ram. So unless you have a 64bit system etc I'd add one gig of ram. Under start>programs>accessories>system tools you find the system information. here you can see how much ram you have, and how much is free. Launch PS and then this should give you an idea of how much you have left for work.

I'd also check whether your graphics card is separate (agp or pcie) or not (shared memory). If it's separate and you find that screen redraw isn't fast enough, try to get a faster one. Normally dualcore processors work with pcie cards, so your card cannot be that old. But as said, this is only for screen redraw, not for performance.

The processor is more than ok for photoshop.

So I would say: add 1 gig of ram and you're more than fine for ps.

Some other things you can do to speed up PS is a/ to set swap files, meaning parts of HDD space it uses when there's not enough ram, to other partitions or a second hdd and b/ to give it about 65% of your ram. Not more, to avoid problems.

There are no Borg. All resistance is fertile.