I know that my biggest upgrade I can make is my CPU, but since I am still using socket 775 I will have to upgrade the Mobo/CPU/RAM. I am not sure if I should go ahead and buy a 2500k or if I should wait for something better. I am also a bit hesitant because I am not sure when the 11xx socket series will phase out.
Also, could you guys point me in the right direction; I know I want a 2500k but I am not sure on optimal RAM/Mobo. I am looking to spend no more than $600, but I would like to keep it around 400-500.
***Sorry, one more question; is a 750w PSU enough to power the newer Mobos/CPUs and my 260GTX?
Yes, a good brand 750 Watts PSU will be adequate for what you are planning to do.
Usually, the biggest bang for your buck is by adding compatible RAM (increase to 8 GBs).
Try putting your components on an Excel spreadsheet and see what the cost totals are. Then decide which route you want to take.
Adding compatible DDR2 RAM seems obsolete to me because I plan on upgrading to 1156/DDR3 within the next year. I guess the question I am asking is if I should upgrade to a 2500k or wait bulldozer/new socket comes outs?
If you can wait about a month, AMD's Bulldozer should be released. Then you can decide between Sandy Bridge and that. Intel's Ivy Bridge isn't set to be released until next year, so it's not worth waiting for.
If you want better gaming, then
To help clarify your options, run these two tests:
1) Run your games, but lower your resolution and eye candy.
If your FPS increases, it indicates that your cpu is strong enough to drive a better graphics configuration.
2) Limit your cpu, either by reducing the OC, or, in windows power management, limit the maximum cpu% to something like 70%.
If your FPS drops significantly, it is an indicator that your cpu is the limiting factor, and a cpu upgrade is in order.
It is possible that both tests are positive, indicating that you have a well balanced system, and both cpu and gpu need to be upgraded to get better gaming FPS.
As a rule, a better graphics card will give you the most bang for the buck in gaming.
If you want quicker everyday operation, nothing beats a SSD.
If you need more cpu horsepower, sandy bridge is as good as it gets.
Look for a 2500K,$225, a P67 or Z68 based motherboard at about $150, and 4gb of ddr3 ram, about $50.
Your psu is probably OK, since the psu requirements are almost totally gated by the graphics card, and you may not change that.
If you get a better graphics card, a quality 650w psu will run any single card out there.