Hello, good burghers of RPS.

After a long period of mostly playing indie & rather older games on my desktop PC (for example, FTL, SpaceChem, etc), I find myself in the position of once again having some "AAA" specced games on my to-play list.
My currently specced desktop, the newest piece of which is a stalwart NVIDIA 8800 GT, is obviously not up to the task.
(I discovered this when trying to play Deus Ex: Histrionic Rhamphorhynchus and finding that, with all the settings turned right down, and even taking into account the fact that my monitor only goes up to 1440x900, I can only get more than 2FPS when there are no enemies on the screen at all. I do not exaggerate.)

So, after a bit of poking around and trying to update my knowledge of what's "good" nowadays (helped a bit by http://www.logicalincrements.com/ ), I've come to the conclusion that it's probably much cheaper just to buy an Xbox360. I'd really rather not do that, though, so I come to you good people to see if you can save my PC gaming alternative.

Luckily, both my hard disks are SATA, and my PSU was apparently fancy enough when I bought it to actually have 8pin CPU power connectors as well as 4pin ones, so I think I should just have to upgrade the motherboard/cpu/ram and, obviously the graphics card to actually get to a "modern" state.

The problem is, of course, the tension between what I'd like to have (something awesome) and what I can reasonably spend money on without feeling terribly guilty / eating into budgets for things that aren't mere frippery. For example: is it really worth getting an i5 or an i7 over an i3 for your processor? Is an NVIDIA 650 actually going to be sufficiently future proof to play modern games (and future games) at something resembling a reasonable frame rate (esp. if I later upgrade my monitor), or do I have to splurge on something horribly expensive like a 660 or higher?
What, in short, is a "reasonable" system? (Ideally, I'd like to spend 300 on upgrading, but that seems to be impossible without making multiple compromises. Generally, though, lets keep costs down, if possible.)

I should note that I'm running a purely Linux system here, so I'm also concerned with driver support etc. As such I'm strongly inhibited from buying ATI graphics cards as I've had multiple horrible experience with their drivers in the past.