What would be the point of "downgrading" to a Q6600 when you have the Q6700? The only reason I can see is if you wanted to get a G0 stepping model which might give you *slightly* higher overclocks.
Also the 9800GT is still a great video card and can run 95% of the games out right now at high settings.
The best upgrade I think for $250-300 would be to get the arctic freezer 7 pro cooler for $30, overclock the Q6700 to 3.0 - 3.2GHz and buy a GTX 275/ Radeon 4890 video card for $220-250.
Can you also give us the specs of your powersupply?