> I have a "128 MB. ATI Radeon X300 Series". It's supposed to have the pixel shader 3.0 > support.
Well it doesn't. Where did you read that? The X300 is a Pixel Shader 2.0 card.
Treat yourself to a 512MB Geforce 9500 GT, it'll be a huge performance upgrade and they don't cost much, you can find one online for about 50 bucks.
(I know some will sneer at that recommendation but it's for the PC you have now - if you go bigger than that you'd probably have to get a new power supply and by then you might as well buy new everything).