Depends on your budget. I'm actually at the same crossroads as you in a way. We've even got the same power supply, lol.
Personally for me, my board will support some am3 cpu's even though it's an am2 board. I'm thinking for myself I'm wanting to drop 2 more gb of memory in to give me 4 gb of ram. And probably go up from my athlon x2 5200+ to a Phenom 2 720 Black Edition. That coupled with the extra memory and my 9600gt should perform decently, after that I'm probably going to go to a 5750 or 5770 for video.
What resolution do you game at? I don't know if a cooler is going to do you much good and if you will get much more than 3.2 ghz from that chip. Depending on resolution I would think of possibly a Phenom 2 chip if your motherboard supports it, and an upgrade to 4 gb of memory.
Once you get there, then that should give you a decent base to work from.
i game around 720p - 900p (but crysis is pathetic) and have enough for a cpu/ cooler upgrade....but can squeeze anything else in there if its reasonable. with the mobo i have a lot of CPU options (can go to AM3 with update) but logically its restricted to nvidia GPUs
thanks for the reply
I agree with jenny. The 720 is 120 bucks, which should be good for now. Instead of grabbing the cooler, I'd go for 2 gb more of memory to make it 4 gb, this ought to give you a decent boost I would think. As for the ati vs nvidia gpu. I have the sli board, but honestly it's looking like 1 more power gpu>than 2 in sli/crossfire in my opinion at this point. So I'd still consider the ATI gpu down the road, or maybe by the time you upgrade your gpu nvidia will have something supporting dx 11 out.?