128GB Crucial M4 SSD (Poor Benchmark)

That depends on what was your reason for purchasing the SSD. If you do all the optimizations for using it as an operating system drive, then the difference between it running at 260mb/sec and 500 would not be extremely noticeable. Are you getting half performance? That depends. If a program starts in 3 seconds on a regular drive and 0.5 on the SSD at 260mb/sec, then increasing to 500mb/sec won't seem extremely better seeing as it goes from 0.5 to 0.25...

It depends if you think it could be even faster or not, or want it faster. If you are getting everything you want out of it, it is perfectly fine running at SATA II speed and there is no problem or anything to worry about. SATA is fully backward compatible.

Granted the comparison is not completely apple to apple, but its similar to Dialup vs DSL vs Cable.
Is Cable generally faster than DSL? yes. Can I normally tell a difference? no. Are both insanely better than dialup? yes

If you think programs could start faster if you double the speed, and think you could benefit from double speed without it hitting diminishing returns(harder to get faster than half a blink...), then it might be worth spending money on a addon card or motherboard. Addon cards I've seen as low as $25 if you have a free PCIe slot, but have not heard good reliability about them. A motherboard is going to run you anywhere from $50 - $200 depending on the quality you get. Anything more than $200 I'd question whether you need it unless you have specific reasons and anything below $50 I wouldn't trust as far as I could throw it.

Logically, yes...
You are getting half the performance of "read speed". Write speed will not be higher than 175~, so its perfectly fine on sata II.

So you are getting full write speed and half read speed. What matters is do you "feel" it could be faster. If it is already instant, that is hard to improve on.