I will be making a minor upgrade to my pc in May. I would either add a second 8800gt and sli it or I would get a phenom.

Might want to wait and see what is around in May before upgrading.

 
I agree. If you even are thinking about upgrading, it would be in your best interest to wait until the B3 stepping, or a new architecture for GPUs. Honestly, it doesn't look like a lot of innovative hardware will be coming out soon in the GPU department.  

 
Well depending on what you do is what will make the decision really. I don't think a Phenom upgrade will benefit you at all considering your current setup.
 
And by the fact that you have a 8800GT already you probably mainly game so another 8800GT would benefit you more since the Phenom doesn't improve in the game area by much if non at all depending on the game.
 
I say wait as well. I have 1 2900Pro 1GB and am waiting until probably 2009 for an upgrade. I have my Q6600 right now that runs great and hope I wont need a new one till 2009 since thats when ATI should release their R700 that I hope is as good as they say it is.

If you want to upgrade your cpu, get a real upgrade, not a crippled processor. As far as sli, well have a great cooling system, and turn off your heater, and kick on your airconditioner your going to need it, what games are you playing that you want to go to sli? Crysis is about the ony justifiable sli game out there right now, if i were you id sell the gt, and upgrade to a gtx.

i would advise against what blacksci advised for there, 8800gtx's are WAY overpriced. If i were you, and you are desperate, get sli gt's, or nothing

what should i do? if i wasn't to do sli or phenom? my budget would be $300

It would help to know why you want to upgrade. Just a simple "I want to upgrade this or that" is pretty vague and leaves a lot of room for widely varied opinions that may or may not help you at all in the end.
 
What games are you running, what monitor, what resolution do you  run at, or want to run, and what problems are you experiencing? What do you expect to get from the upgrade?

I want to run crysis. I have a 19" monitor at 1440x900. I want to be able to run crysis at high without lag. I want a 3dmark06 score better than my current 10000

Checking around the web, benchmarks for Crysis do show improvement with a Phenom, but the improvement when SLI'ing a pair of 8800gt's and a fairly fast dual core (like your X2) is pretty significant. 40-60% increase in frame rate seems to be about normal when you SLI these cards in Crysis. For the money, I'd go the SLI route.
 
Late edit...of course Crysis is very demanding. A Phenom AND 2 8800gt's would be even better, and Crysis would still tax that setup. First though I'd go SLI- it will get you the most initial bang for your buck.

    A second GT would not allow you to hit high at 1440x900 on Crysis, even if you overclock the hell out of both cards.  To your original post, I upgraded my 6000+ to a 9600 phenom, and saw a 5 FPS hit in just about all games.  Also your PSU will be cutting it close with 2 GTs, and will be insufficient if you plan on doing any overclocking.  My suggestion is that you should just save until both the 9 series and the R700s are out.  Wait for both that way the prices will drop, even if your a nvidia fanboy.  You could always upgrade your PSU, you might have to in the future.  
 
Hope this helps, and good luck.