Well, I don't think GTR2 or rFactor will work very well on that system at all and Halo would most likely be extremely slow too.
I really wouldn't put a whole lot of money into that system at this point, especially if you're interested in gaming, but if you don't see yourself getting a new system any time soon then one of these would probably help you out a great deal without breaking the bank:
If the link doesn't work, its a Geforce 6200 AGP (this particular one is a pretty good one).
Its far from top of the line or even mid range these days but it'll be a dozen times faster than a TNT2 M64.
If that power supply had a bit more juice I'd recommend a 7600GS or 7600GT, but I don't know how much more you'll be able to put on that PSU before it starts having problems. Plus, that Pentium 4 with SDRAM is going to be really killing performance for you in most cases, even with a 6200.
A 6200 should work alright, and it'll give you a pretty large performance boost in older games. If you want any more than that though, you'll need a new system. Its worth noting that a decent low-end gaming system (tower only) can be thrown together for under $400 these days. If you have any extra cash laying around, you may want to start putting it aside for a newer PC.