The 7800GTX should be able to handle the Sims 3.
With a 375W unit, you could look at a 4670, which should give you better performance and should also use less power. I say "should" because I can't find any direct comparisons due to the age of the 7800GTX, so this is more of an educated guess without further research.
I didn't see it was a Dell in the first post ... I doubt you'd be able to swap the processor for a Core 2 model so you'll be stuck with that processor (not that it's a huge problem, but it's very power-hungry for the performance compared to newer CPUs).
If you wanted to spend more and get the performance, by all means go for a quality PSU and jack up the video, the HD4770, 4830 or 4850 offer great price/performance ratios, as do Nvidia's 9800GT and GTS250.
A high-end card though will be held back by the processor - still, it's a solid system, and it's still upgradeable (at some point you may want to change the board so you can upgrade the CPU, but of course you'd be able to keep the other components).