Here's a few things for you to consider.
With current processors 'power' (speed/cores), the biggest limitations on the speed of systems are bottlenecks created by the RAM and the system bus.
The easiest way to think about it, is that any process that needs to get to the processor first needs to be loaded into RAM, and then transferred to the processor via the system bus.
Increasing RAM speed and size will definitely speed up your system. Your Core 2 Duo is pretty good processor. With Hyper-Threading, it can run 4 processes at the same time. Since there are very few programs that can utilise more than this, your processor is not going to be letting down your system too much.
I don't know how fast your system bus is, because you haven't posted you motherboard model, but I will assume it is running at either 800mhz or 1333mhz, and thus assume that this is not limiting your system too much either.
So it is safe to assume that it is the RAM which is dragging the system.
When you run a program, your operating system loads it into the RAM (which is like ultra-high speed storage). When the RAM runs out, it copies it to a portion of your HDD, which is called a paging file.
pezonator was right on the money.
Also, when your RAM fills up, your computer will constantly be trying to delete things and replace it, which will slow it down even more.
Using system ready boost may help a little bit, but your HDD (even SSD's) are still going to be significantly slower than any DDR Ram.
So, here are the specs you will be looking.
RAM speed: The number of times the ram cycles per second (measure in mhz). This is the number of times you RAM can write or read data per second. Faster RAM will improve system speed.
RAM latency (especially CAS): This is how long your system will wait in between writing or reading from the RAM, if it tries to read and write to quickly, the data can become corrupted. These latency settings are the four numbers, seperated by dashes, advertised with the RAM. I.e. my RAM is 2133mhz, 9-11-10-27. For these numbers, the lower the better.
RAM size: How much RAM you have in your system.
How much RAM you need is dependent on what you do with your system.
I.e. WOW will use somewhere between 3 - 4Gb of RAM (if it is available). You can get away with less, but if you provide it with enough for full utilisation, it will give you dramatic speed differences.
If you are running a 64-bit Operating system (the Core 2 DUO is capable of supporting 64bit) I would reccomend a minimum of 8Gb of RAM. If you are only running 32bit OS, you will not see any benefit beyond 4Gb (as maximum utilisation is capped at aroung 3.5Gb).
You don't need to go for super fast RAM, but most DDR2 Ram you will find will be 800mhz. If your system is capable of using DDR3, go for this.
You will see HUGE speed differences in your system performance by increasing the size AND speed of your RAM, and will probably get a couple more years of good gaming out of it for a very small spend.