I'm not sure about the bottleneck, but I'm sure your would notice increased performance.
About the ram, are you running 3x1GB? If that is the case then you're not getting the advantage of dual channel memory. You need to use an even number of DIMMs. You would probably notice a performance boost by adding one more stick of RAM.
Unless you're running a 64-bit operating system, you can't take advantage of more than 4gb of total ram. That means RAM+Video Card RAM must be less than 4GB. If you have 512MB of video ram then you will only get access to 3.5gb of system RAM.