If BFBC2 is anything to go by then BFBC3 will use multi core technology, your Intel i5 650 may struggle, it has 4 thread's but only 2 physical cores, having said that even if you had a Core i7 990X your HD5850 won't max out BFBC3 on a 24" display (1920 x 1080 or 1920 x 1200).
I would personnaly go for a CPU upgrade (hard to recommend without knowing your budget)... If you went for a GPU upgrade there is a chance its performance would be held back by your CPU in a highly CPU intensive game like BFBC3.
As a rule, the best gaming is mostly dependent on the graphics card.
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.