We're just approaching this from different angles, mate.
Going the i5 route is by far the faster option, but, currently well out of the OPs' given budget, but he'll have to think of such a change in a year or two at most-parts for the 775 platform are getting scarce-and any system has a finite life, so it'll be a good idea if he starts to look at a full upgrade or new system fairly soon, even if it's just research.
As for the faster CPU: It'll help, but there's no getting away from the fact that this is an older rig and there's only so much more that can be squeezed out of it.