that card would certainly serve you well. you mentioned DDR3. that increases memory speed on the card. the other important spec on video cards is the core clock speed, how fast the engine on the card is working.
take a look at the 6600GT series- my search on newegg for PCIE 6600GT cards yeilded 18 results, ranging in price from $160-212. all have at least a 500MHz core clock speed, and they all run 128MB of DDR3, memory speed 1000MHz.
the substantial increases in those speeds makes up for the reduced amount of memory.This
card falls right in the middle of the price range at newegg, and has a sale going at the moment. so its an option to consider.
I must point out that your power supply is going to be an issue for you running any higher end graphic card. 300 watts is not real high power, and most higher end cards require at least a 350 watt good quality psu.
antec true series, thermaltake, and enermax are good quality psu suppliers.