Upgrading a Dell E521, what components would you recommend?

I have a Dell E521 completely stock and looking to upgrade a few components, namely the CPU, for gaming purposes. Im also planning to upgrade the PSU to a 500w, and graphics card to something such as a Geforce 8800gt. I have a 300$ ceiling between the upgrades, shopping Ebay and newegg. I was considering the Athlon 64 X2 6000+, but i just dont have any grasp on how that will mesh with a graphics card like the 8800gt. I want to avoid bottlenecking and inefficiency.

My system is as follows:

-AMD athlon 64 3200+

-4gb RAM

-NVIDIA GeForce 6150 LE GPU (PCIe 16x)

-305W PSU

My questions:

1) what should i look to upgrade to, and should the CPU's Ghz be the deciding factor?

2) I found an Athlon 64 X2 6000+ 3.1GHz 1MB L2 Cache Socket AM2 89W for 72 dollars, is that a great price or should i keep shopping assuming thats what i want?

3) what graphics card should i be looking at? I dont need the best, just a little better than average.

Any insight would be much appreciated, and my apologies if this question is a bit too broad for this topic section! Thanks in advance.