CPU bottle-necking
I think you'll see a nice speed increase. Assuming you leave the resolution the same, the graphics should be much smoother than what you have now. I upgrade in increments as well. This video card can be used on a newer CPU+MB later, so no worries there. There's always a bottleneck no matter what you do. So upgrade the video card and worry about the rest later.
That's tough to say, it depends if there's a BIOS update for your MB that'll allow it to recognize CPUs like the Pentium E6xxx series. Still Socket 775 but with a faster FSB (1066 vs 800MHz). For less than $90 you can get the 3.2GHz Pentium E6700. Not only it's clocked faster but the higher speed FSB benefits graphics by providing more data bandwidth from the CPU to the Northbridge which talks to the video card.
The problem with a motherboard and CPU upgrade is you will also have to get RAM too, unless you are using DDR3 already. Both Intel Socket 1156 and 1366 is DDR3 only and AMD's Socket AM3 CPUs can use DDR2 if used in an older Socket AM2+ motherboard.
XBit-Labs just did a review of "value" CPUs. Informative if you decide on a full guts replacement, MB, CPU and RAM.
Father Xmas - Level 50 Ice/Ice Tanker - Victory
$725 and $1350 parts lists --- My guide to computer components
Tempus unum hominem manet
Here's my current rig stats
Processor: Intel(R) Core(TM)2 Duo CPU E4700 @ 2.60GHz (2 CPUs), ~3.0GHz
Memory: 4096MB RAM
Card name: NVIDIA GeForce 8800 GT
I'm planning to upgrade to a GTX 470 soon but I'm concerned that my old CPU will be bottle-necking it.
If so, then my other question is should I bother upgrading it? I'm aware that it's an aging MB so should I save up and go with a MB + CPU overhaul?