Holy crap! No need to yell! lol.
I think that idea would work. Although you might be limited cost wise. I'd wait for a year. Fermi is coming out at the end of this month (supposedly) and that will reduce the cost on the ATI radeons. AMD is coming out with 6 core CPUs this year and next year they will come out with their "next generation". Soon enough, although I'm not sure when, Intel will come out with their 6 core supposedly at a $1000 price point where their core i7 extreme 4 core processor is currently. A lot of changes can happen in a year, if you can wait, then wait.
The E6400 is kind of slow though. If you are willing to try overclocking, that might hold you over. If not, what are your uses with your computer?
A CPU upgrade is a viable option though with such an old 775 core 2 duo. A new quad core in your pricerange will provide a significant performance increase. What is the rest of your system though(ram, video card etc) and what are your uses? To make sure you get the most out of your new CPU for what you want to do with your computer, we'll have to make sure you aren't being held back by any other components.
Personally, I think the CPU upgrade is the best option for you. Good bang for buck quad core (for intel that is):
http://www.newegg.com/Product/Product.aspx?Item=N82E16819115057