I3 540 or i5 760 with a GTX 560 ti

The i5 760 is worth the extra $, it would be even better if you get a Sandy Bridge 2500k - almost the same price, you will be changing the mobo anyways if you havent bought it already.  
i3 540 vs i5 2500k:
http://www.anandtech.com/bench/Product/143?vs=288

^ Agreed, but if you can't wait for the Sandy Bridge, then go with the i5 760.

http://www.anandtech.com/bench/Product/143?vs=191

As you can see here, there is a considerable difference in gaming framerates between i3 540 and i5 760.

Oh, and forgot to mention you wont be having that much of an upgrade (or any at all) with an i3 instead of the Q9400 : /
http://www.anandtech.com/bench/Product/143?vs=76

^ For gaming q9400 replacement to i3 wouldn't do anything... not really upgrading the CPU as much as just replacing the board for fun. LOL  

You'll only get 2 or 3 more fps if you are lucky.

But the i5 is a great deal. Sandybridge or first generation. But Sandybridge 1155 boards will give you more future upgrade paths so you don't have to replace everything again in 2 years.

So the 1155 board is meant to be staying around as well as the 1366? I do not get why intel would choose to design processors for two different boards rather than evolve in the one direction.
btw after those bench mark test results the i3 idea has been canned.

Intel made the 1156 for mainstream and 1366 for enthusiasts. But after making their new core architecture, they switched the mainstream socket to 1155 and the enthusiast socket 1366 will be replaced by LGA2011 in the next quarter.

The reason there are different sockets on the same architecture is because of PCI bandwidth and more memory channels. LGA775, 1156, and 1155 only support Dual channel. 1366 can support tri channel memory support while the newer LGA2011 is supposed to support quad channel memory support.

Also since the more of the mainboard functions are going to be incorporated into the CPU in the future. Basically since the LGA1156 the northbridge is becoming obsolete and the newer sockets are doing better with CPU integrated graphics.

So basically 1156 and 1366 weren't supposed to be replaced so quickly, but Intel already sealed their doom when releasing new sockets so quickly. LGA775 had been around for years and they will just stop making some Pentium Dual Cores and Core 2 Quads Q2 this year.

When Pentium 4 came out, it was originally socket 423, which was quickly replaced by 478 and then the 775 that many people still use today. So the new sockets just suffer the fate of all first generation designs and got replaced already.

1920 x 1080 native.
I can only get my system stable at 340 with a 1:1 ram ratio and pci-e at 100 mhz or hertz what ever it is.
I'm starting to think it may be a graphic driver problem as SC will not autodetect my graphics card even after reinstalling windows.
Note when I ran my only nvidia 9600gt I was getting better FPS

also ive been looking at different processors now as well. either the 2600 reg or K version.
Though I would much rather just solve the problem and save the dollars.

Best answer selected by cleandog.