Adding RAM would be wise, but read this paragraph carefully. It appears that it is posible to add 1 GB of PC2-5300 (667MHz) DDR2 SDRAM. This can either be 1 module of 1 Gb, or 2 modules of 512 Mb. Unfortunately, Lenovo's website didn't provide any info about the voltage of the memory. So before adding RAM, make sure you let an expert find that out. Else you might ruin that pc (if it is a wrong voltage).
Ok, now about the graphics card. Since you had your house burnt down, I can imagine you cannot spend hundreds of dollars/euros. So do
not choose Nvidia, their cards of an acceptible price aren't that good (only the expensive ones are). I advise you a ATI Radeon HD 3850, though prices and performances vary. So let's await other people's opinions about this
.