Thinking about going from an Athlon 64 X2 4200 (2.2Ghz) to an E8500 Wolfdale (3.166GHz) or, maybe, a Q6600. I understand that the Q6600 can easily overclock to at least 3GHz, more depending on your particular chip and motherboard.
If I go the E8500 route, I can upgrade for about $225 including a new Gigabyte P35 based mobo. I will reuse my 2GB DDR2-800 dual channel memory from the AMD system and throw in an ATI 2600 PRO 256MB to replace my crappy 7600GS.
Yes, you could overclock the e8500 to 3.8ghz with a Zalmann. Depending on the chip, you may even be able to go higher. If you're not a gamer, though, it may not be worth it to put the extra stress on the chip.
For you to call the 7600GS "crappy" means you're obviously doing more than running business apps. What is your budget for this project? If there is enough, and your PSU is up to the task, you can do a lot better than a 2600 Pro.
I also agree with jtt283. If your sole goal is to improve gaming performance, that 2600Pro will hold you back. Also, the 2600Pro IS NOT a huge improvement over a 7600GS. You're better off spending more money on a better GPU than a CPU. Even with a e8500 at 4Ghz, your gaming will not improve because that 2600Pro will hold it back. Better off spending the money towards at least a 8800GT.