|"500 watt power supply under powered"|
How would we know without a make/model? 500W isn't the only spec that needs to be considered. Does your PSU have a single +12v rail or multiple? How many amps are on the +12v rail(s)? Does your PSU support PFC? Is it 80 plus certified?
"1gig video card and cannot run a cheap graphical game like Rift"
As phil22 stated, just saying it has 1GB memory doesn't mean much.There are plenty of low end, non-gaming cards available with 1GB. Just like the PSU, there are numerous video card specs that need to be considered - type of memory, memory speed, memory bandwidth, etc. Not to mention the make/model of the GPU.