1) I would look to upgrade your PSU & GPU, first and foremost. The GTS 250 is no gaming card! I won't run anything less than a GTX 460 for a gaming setup... IMO.
2) Going with upgrade to CPU, MOBO, RAM... etc won't be wise. You would be better off buying (or building) new. The AII X4 640 isn't a bad gaming CPU & for gaming you won't see a major difference between DDR2 & DDR3 performance wise.
What would you suggest for a PSU and a GPU. I was told my CPU would bottleneck anything above a 460, so do I get a new one or oc this one.