I3 is best or core 2 duo

mister g

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if you go for an i3 you'll need a new mobo that supports LGA 1156, which would mean upgrading to expensive DDR3 ram. To answer your question i3 is Core 2's replacement so it enables hyperthreading, introduces a newer more efficient architecture, making it "better".
 

mister g

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You could still buy a dedicated GPU for your mobo, just that you shouldn't Crossfire or SLI it because than the two GPUS split and each uses x8 lanes. Not sure if this would happen if you buy the Core 2 though.