I have the 128MB version, and it does run new games, but not at high resoloutions or full quality settings.
Doom 3, I get around 50fps at 800x600 with High quality settings. On Half life 2, I get around the same.
But if you got the card, don't expect to be able to place the resoloution up very high. The card just won't cope after a while. Its getting old you see. but with the latest games (or at least some), you can get okay frame rates.
FEAR for example, I get about 25-25fps at high settings which is pushing it a bit.
Your best bet to me is to go for a Geforce 6600GT or 6800 if you can get hold of one for cheap
Those will run games MUCH better.