I am looking to increase my performance in games still though being relatively happy with it right now i always look to be better.
So I currently have:
Phenom x4 965 BE @ 3.5ghz
6gb ram @ 1066
Corsair 850w PSU
I am unsure whether or not for a start if my cpu is bottlenecking or not, and whether I should overclock it more to around 3.8 if possible or just buy a new cpu, something like a i7 2600k (though i would need a new motherboard for this)
I agree with the people who say put in a bit more RAM if you want to keep the platform you have. The number of applications we have, services, and total processes climbs with time. 4GB was a lot not long ago, but it isn't much now.
The best way to see if you need more RAM is to open up task manager, then go to resource monitor. On the memory tab look at hard faults per second. If you see a fair number of hard faults then its time to stick more memory in. Any time your system has to cache to the HD it is paying a huge performance penalty.
As to the relative benefits of switching platforms.. If you upgrade to 8GB of ram along with a new MB, and a 2600K -- I wouldn't expect much more than 6-10FPS in most games. That might be enough to justify it you, but you might as well try the overclock first.