The power supply wouldn't reduce performance if it was the problem, just cause freezes/restarts. etc.
Do this: Control Panel -> add/remove programs -> ATi drivers (if XP)/ CCC install manager (if Vista, and select remove all) -> Reboot in safe mode and run Driver Sweeper
(select ATi-display) -> Reboot again and install Catalyst 8.10
Also, what resolution are you playing at? If it's at a low resolution then it most definitely is your CPU bottlenecking. The performance difference between the 8800GTS and the 4870 will only be seen when you go up the res.