Upgrade or buy new, thanks for any help you can give

Why not an intermediate upgrade? Grab an Athlon x2 5000+ black edition and better cooler, AM2+ motherboard and 4 gb of ram as well as your new video card. Then you aren't spending all your money and can overclock the 5000 pretty decently. After that, if you decide to stay AMD you can go to the phenoms when/if they get better and you want to stick to AMD, or if you want to get the newer intel stuff, you've already got a good card and some memory, so you'd probably be able to sell the AMD stuff and get some of your money back. It's up to you.

Here is what I'd do right now:

CPU - q6700 It has a 10 x multiplier so it'll OC easier to 3.2-3.6 gHz, which will be plenty of CPU for quite a while.

CPU HSF - Xigmatek s1283 CPU HSF. Going for $37 shipped at newegg and is one of the better coolers that you can buy. Most other coolers close to this one performance wise is about $20-35 more.

Mobo - DS3R/IP35 Pro/Asus p5k series of mobo's. All are around the $130 price (if you include MIR's). They all have great features and are priced well for a build like this. You could go with a x38 based mobo, if you would consider a Xfire setup. Maybe the new 48xx GPU's will be good, don't know yet, but should be out really soon.

GPU - At least the 8800gts (g92) 512mb card. You could go with a 3870x2, so you could have a bit better performance on the higher resolutions.

Memory - 2x2 gb's of Corsair/Crucial/G.Skill/Patriot/Adata memory modules. Get at least DDR2 800 mHz CAS 4 stuff. This will cover just about any OC on the CPU that it can handle (which would be no more than 400 FSB x 10 mulitplier = 4 ghz, which I'm not sure the q6700 can handle that). This would equate to 800mHz speed on the memory, which is right where you'd want to be.

Case - Antec 900/Cooler Master 690 at the least. Get whatever you like, but these 2 are good candidates and are priced around $100.

PSU - I'd go with at least a Corsair vx550w PSU. It has 41A on the 12V rails and is usually priced around $75-85 after MIR's. Another option to consider would be the Corsair tx750w PSU. It has 4 6+2 pin PCI-e adapters (which would be handy if you had 2 9800gtx's, each card needs 2 x 6 pin power connectors). It has been going for about $120 on newegg after MIR, so you can decide here. A good 500w PSU will handle any single GPU solution out there right now.

With DVD Burner and OS this should put you around the $1200-1500 price range, which is what I'd consider.

Another option is to stick with AMD and build an AMD AM2+ system. This wouldn't be as fast as the Intel build above, but would cost a bit less than the Intel build. If your interested in an AMD build, I could suggest a few things, but if your willing to spend $2,300 on your original build, I don't think your too concerned if I can save you a $100 or so on the Intel build above.

I wouldn't buy a new video card until the new ones come out in a few months. even if you don't buy one of the new ones it should drive down the prices of the others.