I will not stick with core 2 generation, it just too outdated.
I think a i3 2xxx sereis will be the best, with H67/H61/z68 mobo, pair with 4g(32bit)or 8gb(64-bit). that way, after couple years, you have the option to update to i7(maybe even ivy bridge). the cost is around 200 usd
I would actually think your video card is the bottleneck - it's 5 generations behind (I'm 7 behind). However, I'm running a 7600 GT with a very powerful i7-2600K just fine. The video card and processor combo doesn't matter as far as compatibility goes, but, chances are, if you upgrade your processor, you'll also have to upgrade your motherboard and RAM along with it.
However, your needs depend on what you do. If you're into gaming, then you'll want to focus more on the video card than the processor. If you're into video processing like I am, then upgrading your processor is more important. If you're only after Internet browsing, light gaming (like basic pinball or card games), word processing, or doing 2D graphics, then your system is more than enough as is.