At lower resolutions (< 1650x1050) the CPU will probably bottleneck you some, but at higher resolutions the CPU will become less of a bottleneck as the load shifts to the GPU. I would recommend overclocking your CPU to give you some extra headroom.
in a lot of cases it will depend on the games you play. a game like battlefield bad company 2 needs more than 2 cores to enable it to use more than 50 percent of the gpu power.
while crysis would run quite happily at much higher settings as it only needs a dual core.
overall i would recommend you switch the core2duo out for a quad of 2.4 or faster.