IwinFTW :
Does your motherboard support DDR2 or not? You're saying you're using DDR2 but then you say your mobo can't handle DDR2. Also, buying DDR2 RAM is not an upgrade, it's a downgrade.
Your motherboard supports upto 8GB of memory. It has 4 slots and max per slot is 2GB. The following is the link for compatible memory -
Abit IP35 Pro.
Your motherboard supports upto 8GB of memory which should handle almost all the software's pretty well except the high memory intensive ones. So I think upgrading this motherboard's memory will enable you to work for another year or two but depends. It is pretty useless to upgrade a motherboard (maybe higher end) just to support the current CPU. Even though you may get the best upgrades for your motherboard but your CPU still be your bottleneck. So I'd say go for a complete overhaul.. IMO, go for memory upgrade for now and when you 've the right budget get the latest mobo n CPU.
Good luck!!