I have a radeon 6850 1gb OC 850/1100. I can run with higher textures but I get a hit to my fps and it dips in stress areas like Whiterun. I'm comfortable with at least 30fps but when it starts getting lower than 20 I can definitely see it. I'd also be upgrading from 4gb to 8gb regardless of other upgrades.
Upgrading to i3 or increasing you RAM will help you very little run higher textures at better framerates.
Although I recommend upgrading to an i3 from your current processor.
You have to upgrade your GPU to get significantly better Framerates.
I don't think that there is anything left to discuss so select a best answer and close the thread.