I would recommend a GTX 460 if you can afford it. The GTS 250 is an alright card for its price but I would forget about the GTX 260. An HD5770 is its equal in performance, cheaper and better in many other ways.
What is the native resolution of your monitor? Have you ever tried overclocking that processor? 2.6ghz is a bit weak for today's games but it should OC well and then it is fine. Also 2 more gigs of ram would be a good idea.
The resolution is set 1280 x 1024, so not that high but fine for me, I have never overclocked the CPU cause I am not sure to what level of overclocking. Why do you suggest leaving the gtx 260? Cheers again
I recommended against the GTX 260 because the HD5770 is cheaper, DX11 compatible, has more current A/V features, supports 3 monitors and uses much less power, especially at idle. It is actually the card I would recommend for your resolution. Here is one from a good brand for $145 shipped and it has a $15 rebate; http://www.newegg.com/Product/Product.aspx?Item=N82E168...
It will do extremely well at your resolution.
As for overclocking the processor something like 3.3ghz should be very easy to achieve even on the stock cooler and at that speed it will do fine.