Well, first of all, that 3000 is not a bad chip by any means. If you upgrade to the 3700 with a new MB, chances are, you'll see quite an improvement. Reason being is, you would be upgrading not only the processor, but the MB itself which has newer technology like PCI-E which has much faster throughput. For gaming, that alone can make quite a difference depending on how you set it up.
I would venture to say to go ahead and upgrade it.
well luminaris has a point but can you wait for m2 it comes out in a few months it will have ddr2 and it will be the new flagship socket for amd like a was for your 3000.I have an xp 3200 barton with the same graphics card and i can play bf2 on medium fairly good so dude best advice i can give you wait
"Or should I buy another gig of RAM for gaming and keep what I got currently?"
I'd stand pat if I were you, despite the A64 being a bit faster than any socket A models. As you are at a 3000+ point and with 1 gb of RAM, and a 6800GT, I'd say your rig is still capable of decent gaming. and would probably just wait for either the debut of socket M2/DDR2, or socket 939 price cuts, or both!
(Yes, your low res framerates would jump noticeably with a 3700+, but at high res, a jump from 40 fps with your XP3000 to to perhaps 50 fps would hardly seem worth the $350 spent now...; just upgrade the entire rig when games arrive that an AGP 6800GT is too slow for, which will prob take a year)
Although if you had a buyer for your AGP 6800GT in the $300+ range, it might my cost-performance conscience and advice!)