If you do not want to upgrade the motherboard and RAM, then you can consider upgrading to the C2Q Q9400 / Q9450. The Q9450 is still a viable CPU, but it is definitely not going to equal a Core i5 CPU. The main difference between the two is the Q9400 has 6MB of L2 cache while the Q9450 has 12MB of L2 cache. Based on my memory, reviews of these two CPUs showed that for gaming purposes the extra 6MB of L2 cache does nothing to improve performance, but for video encoding it provides up to a 10% increase in performance.
If you want to upgrade to a quad core Intel Core i5 CPU, then you will need to spend more than $300 for the upgrade because you will need to buy the CPU, Mobo and RAM. Upgrading to a dual core Intel Core i3 CPU will be possible for under $300.
Alternatively, you can upgrade to AMD CPUs. They are not as powerful as Intel CPUs, however, they will be more powerful than what you currently have. For under $300 you can get a six core FX-6300, along with a mobo and RAM.