the following are my system properties

motherboard: intel DG31pr
CPU: intel core 2 quad q8300 2.5 ghz 4 mb cache
Hardrive: 160 gb
GPU: nvidia geforce 8400 gs 512 mb ddr2
RAM: 4 gb
DVD Drive: LG GH22 ( double later )

My question

do you think I need a better graphics card for games such as crysis, gta 4, COD World At War, The sims 3, Pure, the witcher, dante's inferno, nfs shift etc.

I don't have all of the above games but I will puchase them soon but I others have such as crysis, COD WaW, Pure, The witcher etc and I am not satisfied by the gameplay but

do you think I should upgrade my GPU if yes then which one do you recommend ( only nvidia )

I think it would be better if you tell me a gpu till 170$

my board has pci e x16 slot and I am using a vga cable for monitor because my monitor does not support dvi cable ( don't worry it is a lcd)

I would like to have a gpu which would run games on 1024x768 on medium or high settings

so is it worth upgrading my gpu or should I hang on with one only?

Look up the recommended system requirements for each game. For instance, Crysis recommends a NVIDIA GeForce 8800 GTS/640 or better. The only game in your list I have is Witcher, and I have a NVidia 7800 GT and a Pentium D, so you should be more than OK there. Whenever I buy a new video card, it turns into a 2 month research project and I'm not willing to spend that much time on this question, so instead visit Tom's Hardware's Graphic Cards Performance Charts (http://www.tomshardware.com/charts/graphics-cards,1.html) to get an idea of comparable performance and then shop for what will fit your budget. My last couple cards have been PNY and MSI brands with no issues. The only brands I avoid are Gigabyte and Asus due to prior experience with their motherboards - Gigabyte GA-7VRXP leaked caps and caught fire, and Asus TUSI-M systems would turn themselves on randomly if Wake-On-LAN was enabled. Your experience may be different.

I think it's enough, but check this site:
Can You Run It (http://cyri.systemrequirementslab.com/CYRI/intro.aspx)

If you don't have java installed it will ask you to install it.
When it will ask if u allow java to run, allow it.
It may say sometimes that the game will not work if you have Windows 7, you have to look if this is because of the Operating System, if it is so, then you don't have to complain about it, it will work.