I am currently running a Win7 x64 system with an AMD X3 2.9GHz CPU with 4GB RAM and an ATI HD 5570 with 1GB VRAM on a 19" widescreen monitor. The system is just a little over two years old, but still works great except as noted below.
I am a light gamer (WoW, SWTOR, Diablo3). I am an amateur radio operator and use my computer for light contesting and digital modes. I also do some light audio dubbing and video editing and I edit and publish a small (four page) monthly newsletter. Of course, there is the obligatory usage of web browsing, email, word-processing, etc.
My current system runs pretty good on everything except SWTOR and D3. D3 actually stutters a bit and crashes at times - I have to run the settings down, but it is playable. I like to have my cake and eat it too when it comes to gaming - form *and* function.
Approximate Purchase Date: e.g.: Before August 1st.
Budget Range: ~$1000 After Rebates; After Shipping. If I don't need to spend this, I won't spend it. That's just the max. No need to buy stuff just to get it.
System Usage from Most to Least Important: Desktop system, gaming, amateur radio apps, video/audio editing/dubbing, watching movies, desktop publishing, web browsing, email.
I think what I'd recommend for you is a more incremental upgrade. Just get a new monitor and a new video card. Your processor is not the greatest thing in the world, but if you're gaming at 1080p and the two games are SWTOR and D3, you really don't need some world-beating CPU. Save the money for a more substantial upgrade (when you also upgrade your CPU) down the line. (This is informed partly by the Tom's article at SWTOR release: http://www.tomshardware.com/reviews/star-wars-gaming-te... )
You could get another 2x2GB of your existing RAM (assuming your mobo has 4 slots) to get to 8GB. That will save you a few bucks. There's nothing wrong with your current RAM. In fact, 8GB is widely acknowledged to be "overkill" right now, and you could get away with 4GB (or 6GB) for now.
I don't have any special insight into what monitor to get; I'll leave that to someone else. Basically I always just look for a cheapish 5-egg monitor on newegg.
As for video card upgrade--some people might tell you to go nuts and get a 7950 or something. You could do that, and if you want to spend just north of $300, get the twin frzor 7950 and use it with glee until the end of time. But if you're playing SWTOR and D3 at 1920x1080, that is overkill. Instead, given your AMD preference, I'd get either a 7850 for about $240 or this 6950 for $190: http://www.newegg.com/Product/Product.aspx?Item=N82E168... If you want to go lower, get a 6870 for about $150 post-rebate.
A 7850 is a solid choice, and it's slightly better performance than the 6950 at lower power consumption. It also overclocks better. So if you want to spend a few extra bucks, it's a good choice.
Anyway, if you got another 4GB of RAM, the 7850, and the monitor, your overall upgrade would be under $500. You can save the rest of your money to upgrade your CPU and mobo later.
I am in general agreement with motorneuron on doing some incremental upgrades first. Your PSU is good for any single card, so you can leave that alone.
I am puzzled by one thing though...is your current video card a HD5570 (first sentence) or a HD5770 (in your From: section) ? I could understand a HD5570 having difficulty at 1440x900, but I'd expect a HD5770 to do a lot better. If you have the stronger card and are experiencing stutter and lag in D3, it could be any number of other things, from your Internet connection to outdated drivers, malware, and/or background processes.
Especially if you have a HD5570 though, buy a stronger card; the money won't be wasted because you can take it with you if/when you rebuild. If you'd rather keep costs down, I'd suggest a HD7850 at most, perhaps a HD6870 (and the 1920x1080 monitor). Run that in your system and see how it performs. You might be happy and stop right there.
As many AMD systems as I've built, I have a hard time today recommending another one if you are starting fresh. If you're "almost happy" with the video card upgrade though, you might then upgrade your CPU to a 965BE. Make sure your motherboard supports at least 125W CPUs, preferably higher, because you'll want to overclock it. Yes, you will. The 965BE is only one tier higher than the X3 435, but overclocking will easily get you at least one more tier, maybe two. Add a $30 CPU cooler such as a Xigmatek Gaia for enough cooling to reasonably expect to get up to 4GHz from the 965 without too much effort.
If the graphics card upgrade alone really didn't make much difference (i.e. you're not "almost happy" with it), then it would probably be best to just bite the bullet and rebuild using an Intel i3-2120 or better (at this point, I'd opt for an i5, but you know your budget).
Get the 965 and a 7950. I've got a 965 clocked up to 3.8Ghz, and the northbridge pumped to 2.4Ghz and its sufficient for current games. It will last at least for another year. And in a year, Haswell and Piledriver should be out. When the PS4/Xbox whatever comes out then it might be worth looking at CPU upgrades. Right now, get a solid foundation and forget about it. For the GPU, get an OC 7950 and pump it up further. Sapphire is a good brand.
Going to do this incrementally and see what I get with this two-year old machine.
A couple of things I did though (I'm just not much of a tweaker on newer systems. I used to do it and I quit.):
1. Adjusted the timing on my RAM. My MB is a Gigabyte MA790GPT-UD3H (http://www.newegg.com/Product/Product.aspx?Item=N82E168...). I went into the BIOS and adjusted the timing on the RAM from Auto to Manual. Most of the timing was correct except for the last number - it should have been 2T (whatever that means). I also adjusted the voltage on the RAM from 1.75 (auto) to 1.5 (recommended). I didn't notice any significant change by doing this. According to Gigabyte, this MB will support Phenom II X6, but I cannot find those anywhere.
2. I turned off my cloud-based backup while playing. This didn't really seem to change anything.
2. Dell U2312HM http://www.newegg.com/Product/Product.aspx?Item=N82E168...
I decided to go with the 23" vs. 24" due to current desktop real-estate. I will have to do some re-arranging once it gets here. After taking the 24" dimensions into consideration, I was going to lose more real-estate than I wanted (you've got to see my desk to really understand).
At this point, after my mail-in rebate on the video card, I have spent just shy of $500. If I do decide that I'm not quite happy with my upgrades, I'll upgrade my CPU, I may just go with a quad-core Intel. Yep, I'll have to purchase a new MB - so be it.
Thanks for the system config. I found that website - very nice. I used to use pricegrabber.com, but they fell out of favor for me for some reason that I now forget.
Nice choice on the video card; I like the three XFX cards I'm running now. My primary rig has a HD7870 in it, but I see a possible HD7850 for the backup rig.
I have one 23" monitor, but when I wanted another, I got a smaller, 21" model for the same reason you did; I've pretty much run out of desk real estate. I actually prefer the smaller one.
I used a similar Gigabyte 790GX board for my wife. That was probably four or five years ago, so it was AM2+. That last "2T" number is command rate; 1T is faster, but may not be stable on a lot of systems, especially with reduced voltage.