My first concern is overheating. I've never done any aftermarket cooling. I have recently been using more and more cpu usage, and im up to about 40%-45% cpu usage at all times. Using CPUID Hardware Monitor my cores are running at an average temp of 75 degrees celcius (around 170 degrees F). Looking around has told me this is too hot for an average temp so I am considering liquid cooling.
The first issue I see here is that you have a "locked" processor, that is the CPU multiplier cannot be raised (it can be lower though). With the Z68 chipset on your motherboard (which would be awesome if you had a "k" unlocked processor), you are severely limited on playing with your FSB, in fact few Sandy Bridge overclocking guides even go into manipulating the FSB.
An upgrade to any "k" model processor (IB with BIOS update) will enable you to overclock.
The H80 should fit your case (most any case) without issue.
If you're mostly looking to use your rig for gaming, I'd suggest an i5 2500k processor which compliments the abilities of your motherboard/chipset nicely. The Sandy Bridge will also provide for higher clocks than an Ivy Bridge CPU (which tend to run hotter). If you are doing other tasks that require (or perform better with) hyper-threading, then the i7 "k" model would be a good choice, otherwise it's potential (and extra cost) is wasted.
The H80 is a very good cooler but, if your case supports it and you're interested in an all-in-one, I'd suggest the H100 which performs better than most air coolers on the market today
Dont need a Bios upgrade for Z68 boards to have Ivy Processors in them, that's H61 and P67.
If its just a gaming rig, then an i7 is pointless. Sidegrading to a 3570k isnt worth it IMO just for the overclocking ability. Would just sit with what you have until Haswell, when you can properly set up an overclock capable rig.
None of the all-in-one watercoolers are worth it except the H100 IMO and even that's debatable as its equivalent to a Noctua NH-D14 in performance, which is cheaper (though I personally would get the H100 over the Noctua, thing is huge and ugly as).
however as is the h80 is more then enough for your cpu, due to the lack of overlocking, you mostlikly see 63-64 temps max on 100% load.
Another cpu cooler you can try is a cm 212 or a ets t40 both are around 40 dollars US.