Due to your system use, I would recommend as many cores as you can afford. A core2 quad would be great!
Have a look at this:http://www.newegg.com/Product/Product.aspx?Item=N82E16819115055
It's an Intel Q8200, the cheapest quad by Intel.
2.66ghz (That's per core)
$159.99, not much more than your other suggestion.
It will work with your current motherboard, too.
Another suggestion, you may want to upgrade to 4gb of ram. But you will also have to get a 64 bit operating system.