Do you have an AGP or PCI-e slot? whats your PSU? Whats your CPU?
EDIT - Re-read your post:
2.8 P4, 1 GB RAM and a 7900GS.
Your GFX card is fine, you just need a better CPU. How about this mobo, this CPU and this RAM. Comes to £112.77 without postage, however you might need a new PSU, and i'd get a slightly (£10 more) better mobo.
AA "smooths" the image so that you don't get the jagged edges. With your card you should be able to do 4xAA, 16xAF easy.
erm, i wouldn't mix them, but you could keep your current RAM if you want, although IMO i'd get that RAM (£25 is a GREAT price) and sell the old stuff on eBay, as the newer stuff is a fair bit faster.
when buying ram, you should always go for the same make and model. i currently have 2x512mb of corsair extreme and 2x256 corsair value ram running in duel channel mode. my next purchase will be 2x512 corsair extreme and put the 2x256 into a mobo and cpu i have sitting around (amd 2600+). all ddr1. but i would not plan on upgrading the ram any further.
i would do this ^^^^^ i just thought i would say about not mix 'n' matching sticks of ram
p.s. you wouldn't believe what an extra £30 could do for your budget. save for a while longer (maybe until you hit £200) and you will not be sorry you did either.
75 to 100 fps at all times? with that setup you won't get 75 fps at all times, but chances are you have a 60 Hz TFT monitor, so it's pointless having anything more than 60 FPS
On your own, yes, but with a full grid and that hardware your looking at 40 or 50 fps with 4xAA, but the second some of those cars go you'll be at 60 fps in no time and be having great image quality
Pentium D and Core 2 Duo are different architectures. The Pentium D is like 2 Pentium 4's on one die. So it technically is Dual Core but it cannot be compared to Core 2 Duos clock for clock (as in a 1.8Ghz Core 2 Duo is about equal to a 3.6Ghz Pentium D).