One of the best ways to sort out your system specs is to take a couple of top games and look at the top specs they need to run the games at the top settings. Three games come to my mind for high end graphics:-
1) Arma II Operation Arrowhead
2) BF3
3) Skyrim Elder Scrolls
The system your proposing will not be capable of running these games at high end graphics, even medium settings you might have to reduce graphics settings to get reasonable frame rates. Your let down by the graphics card, there are older Radeon HD cards that out perform your choice.
The other item to consider is your HDD size. Modern games can take up a lot of space, BF3 for instance uses almost 15Gb. By the time your O/S is installed and a few other bits and pieces you will not fit many games on 320Gb.