To answer your first question: Yes, the new hardware is absolutely compatible with your motherboard, assuming your motherboard model is actually the ASUS P5G4
1C-M LX (note the change from 4i to 41).
Here is a link to the ASUS specifications page for that motherboard.
Those who told you that you cannot upgrade to DDR3 RAM are wrong. I'll to highlight the memory specifications from ASUS website below:
2 x DIMM, Max. 8 GB, DDR3 1333(O.C.)/1066/800 Non-ECC,Un-buffered Memory
2 x DIMM, max. 8 GB,DDR2 1066 (O.C.) / 800 / 667 MHz Non-ECC, Un-buffered memory
Dual Channel memory architecture
"*DDR3 and DDR2 memory can not be used simultaneously
Use DDR3 memory modules on the black slots and DDR2 memory modules on the blue slots."
** Refer to www.asus.com or user manual for Memory QVL (Qualify Vendor List)
*** When installing total memory of 4GB capacity or more, Windows® 32-bit operation system may only recognize less than 3GB. Hence, a total installed memory of less than 3GB is recommended.
A couple other notes: Keep in mind that you will have to reinstall Windows when you upgrade the processor. If you are keeping the same version of Windows, and if that version is 32-bit then you definitely want to stick with only 4 GB of RAM. If however, you are changing to a 64-bit version of Windows, or if that is what you already have, then I highly recommend upgrading to 8 GB of total RAM (get a 2 x 4 GB kit instead of a 2 x 2 GB kit). I like the
Patriot Gamer 2 Series 8GB (2 x 4GB) Memory Model PGD38G1333ELK for an 8 GB kit and
CORSAIR 4GB (2 x 2GB) Memory Model CMV4GX3M2A1333C9 for a 4 GB kit. Neither of those kits is listed on the MB "QVL list", but that list actually doesn't include any 1333MHz DDR3 memory modules, which ASUS does say can be used with the MB. QVL lists are never all-inclusive.
Make sure you are up-to-date with the Current BIOS (version 0702 according to ASUS website) as that most recent update has improved the memory compatibility.
With regard to the video card you have chosen: Is this the card you are planning on purchasing?
ASUS EAH6670/DIS/1GD5 Radeon HD 6670
If so, and assuming you are spending ~$100 on it, then you might want to consider switching to something like the
XFX FX-775A-ZNP4 Radeon HD 7750 or
ASUS HD7750-1GD5-V2 Radeon HD 7750 for roughly the same price. They are newer cards that should give you better overall gaming performance. They are PCIe 3.0, but I don't think that should cause any compatibility issues with your motherboard. Check
this link for further evidence others have had success with backwards compatibility.