I like the AMD X2 5200 or 5600 for good price and performance (& 2M cache as opposed to the lower than 5200 models that sell at good prices (4600 & 4200). The mobos for AM2 are a lot cheaper than comparable LGA775 boards (M2A-VM HDMI is a fantastic small board with video for real cheap - see DirectCanada or NCIX maybe). DDR2 memort (AM2 or 775) is unbelievably cheap now - see OCZ platinum rev2 2GB sets.
I remember seeing the 939 X2 CPUs being a lot more expensive than their AM2 counter parts. DDR RAM is also pretty expensive, compaired to DDR2. It might not be too much more to upgrade to an AM2 board. If I wasn't typing this on my phone I'd do a comparison for you.
I'd get an opty 17x or 18x, can still be had relatively cheaply, and another GB of ddr ram.
save the rest of your $, add some more to it, read a bit until Xmas time... There will be several major changes between now and then.
BTW, you didn't mention what GPU you were using, or what PSU you had. If your GPU is underpowered, a better CPU won't help much if at all. And if your PSU is an old POS, then you won't be able to upgrade your GPU....