Given the situation you describe, I would go with the Phenom 965. Its less expensive. The 920 is a little faster overall, but its pretty close in gaming. AMD is also more likely to have an upgrade path than Intel. And I have a soft spot for AMD since their competition helps keep prices down.
If your overclocking, the I7 920 positon becomes stronger as they are faster overclocked. But I gather your not.
A third alternative would be to go with an AM2+ board which will also accept the 965 and allow you to reuse your memory. Many fine AM2+ boards are already 6 core ready for future expansion. Thats a lot of money saved that could be put towards other things.
And finally, depending upon your board, you could upgrade to another core 2 quad. they are still great chips if you can find a fast one at the right price. And they game about as fast as the I7 does.
Almost forgot the OS part of the question. I have in the past moved xp drives and installs to different machines with similar chipsets with some success. But a repair install was always a good idea.
Windows 7 does not have a repair install, but you can do an upgrade install once you move the drive which would achieve the same result. The question is, will it boot if you move it? Im not sure. I assume yes, but have not tried it or heard of anyone trying it with Windows 7. Maybe someone else can provide more info on that. But if you can get it to boot with the new setup, then you should be able to do the upgrade install and you should be good to go at that point.
+1 on the 965. I am currently running an Athlon II x4 and at the stock 2.9 speed it drives my 2x4850 xfire setup without breaking a sweat.
For gaming you will be GPU limited no matter which chip you buy -- I agree with Falcon -- if you are doing this for gaming I would either overclock your C2Q or upgrade to a faster C2Q -- either will be able to drive your 4890.
As for the OS install you could probably get away with not doing it but I always like to do fresh installs when I change mobos.
First I'd point out that the new 6-core AMD CPUs are to be released in a month. You may wish to wait til they're out before planning a new build or motherboard/CPU/RAM upgrade path presently.
You've got a very capable machine as is. BFBC2 really loves quad-cores, so you've got that covered.
I honestly agree with the sentiment that you overclock your current CPU. With a solid aftermarket cooler, it's quite likely you'd be able to get it close to or beyond 3GHz, which should significantly improve your system's overall performance. Even with the stock cooling it could probably hit 2.5-2.6GHz rather easily.
That or upgrade to a Q9400, which at $190+ is quite the expense in and of itself, but it would increase the system's performance. But as I said, your CPU is probably capable of similar speed (2.66GHz) while mildly overclocked using the stock cooler.
Well, I'd go for the Phenom II X4 965 3.4GHz if you do not plan to use more than one relatively high powered card in the future, anything more powerful than an HD 4890 for example in CFX or SLI, high powered cards will be held back.
For overclocking, I wouldn't bother much - the Q8000 series, especially the Q8200, does not overclock well - a classmate of mine cannot get his stable at 3.0GHz, a speed at which the Phenom II X4 965 would still be faster.
You could wait for the Phenom II X6 1090T, whose larger L2 cache and AMD's own Turbo Boost may give a significant boost in gaming performance, relative to Phenom II X4 965.
If you want to upgrade to DDR3 RAM, then go for an AM3 socket motherboard. If possible, get an 890GX chipset based motherboard, most if not all have SATA III, and some have USB 3.0.