Honestly if that's not enough power for your photo editing needs than you need to consider replacing your computer. Here are your reasons why:
1. Your older 775 socket doesn't support anything bigger than the core 2 quad, which in any case doesn't get much better then the one you have. You need to get at least the new sandy bridge i5 quad core option. This will give you some leeway for a few years and allow for upgrades. Since your not making this build for a while I'd wait and see what bulldozer can do, AMD's new processor has so much hype about it most are practically wetting themselves any time a definitive release date is mentioned. Also, intels new Ivy-Bridge processors should be out early 2012.
2. DDR2 memory technology is old, and lets face it, it's slow. A definite improvement over the original DDR but still nothing like DDR3. I'd recommend something in the 1333 or 1600 Mhz range.
3. You REALLY need a new graphics card. The 9500 series is almost older then I am (ok not really but you get the point). Honestly you might want to consider workstation class graphics, you'll get much better performance in application software than normal consumer grade cards. If you still want a normal card don't compromise, photo editing still requires a good amount of GPU power, go with either a nice Nvidia 570 (or the equivalent AMD card), ooooorrrrr you could invest in an SLI configuration, which in my opinion would be the way to go. Get two 460's or higher and you'll have power to spare i.e. a performance boost for your gaming
4. Really a harddrive upgrade isn't necessary, unless your storing large amounts of data like movie files you wont need huge drives, and most people get by just fine without a SSD. Now lets hear the reasons you SHOULD invest in something like this. One word, power. I'd recommend an HDD/SSD hybrid. Take a run of the mill 1 to 3 TB HDD, add in a small 100ish Gb SSD and you've made a cost effective way to balance your time and money.
5. Windows vista is a perfectly fine OS, but for some reason a lot of people hated it when it first came out and because of that a lot have shied away from it causing Microsoft to create Windows 7. With the onset of the newer OS vista was thrown to the back and was never given much attention by MS. That being said windows 8 should be coming out early 2012 so pick one of those.
Your current system is plenty powerful for photo editing via those programs.
Id say to save everything off the hard drive, reformat, then reinstall the OS. Then only install the programs you use. You will see a big increase in performance. The only thing id say to upgrade is the videocard, in which case would also be transferable to your new system down the road so its a win-win. On the ATI side get any card above a 5670 and on the nvidia side get anything over a GT240. check to see if your PSU has a 6 pin pci express plug, if so you can get any card that has just 1 plug for power.
Thank you so much for your replies guys...I'm learning so much tonight my head hurts!
@ragenalien - Thank you for such a well-written thought out reply, it's much appreciated.
I totally realize that a new PC is probably the way to go, though I think with this AMD gear coming out, maybe it will drive prices down, or open up some different options.
We have a good budget for the build when it comes, that isn't really an issue.
I guess the little upgrade i was thinking of most was a RAM upgrade, take it to 8gb instead of the 6gb. See if she notices any difference from that.
Also, I could add a smaller SSD in there and use it as the scratch disk for her PS work? Then move that drive to a new rig?
Maybe those 2 little upgrades would appease the wife for a few months?
Also, the graphics card had been replaced last year with a Saphire HD5550 1gbddr3 (the 9500 did die a horrible loud death).
That being said...
@StarRavier Im excited to build a pretty powerful machine. Our budget, including monitor is ><$2000.
Ideally it would have a ton of fast ram, lots of storage options (im thinking SSD+ x2 HDD in RAID for storage? We have had some HD failures, so we are super safe and redundant about backups), and a 24"+ IPS monitor
We would probably buy a new keyboard and mouse anyways cuz this HP one is flimsy and crappy Dunno if there is anything worth saving from this pc other than maybe the x2 500GB HDs? maybe the HD5550?
Knowing Blizzard and their policy on having as many customers as they can (and I'm referring to the subscription-based WoW series here), Diablo 3 probably won't have that much higher system requirements.
Tom's did a piece on SSD's being the cheapest (and probably best) method of upgrading and older rig. I would go with that. Photoshop/Gimp will open much faster, boot time will decrease, and the general "snappiness" of the machine will make it seem like a brand new computer.
For just photo editing and Diablo 3 your current computer is good enough and will get you well over next spring.
I build a system from ground up with the maximum hardware available. The only possible upgrade path left on my new build is literally either a Revo PCIe SSD, Raid controller card with very fast read/write, touch screen monitor and a Ipad or pod charging.
Everything else is the tops of the charts. Except one item. I used a i7 2600k 1155 CPU for 300 dollars instead of the gawdawful expensive i7 extreme 1000 dollar CPU. whew...
My next build will have TWO strong CPU's putting me into a Server territory from then on.