1. I currently have a 775 socket for my processors with a intel core duo (2.93Ghz) I realize that i can upgrade to a quad core in this socket size, but the max speed said it was 2.6 Ghz is it different for quad cores with Ghz speed? and is it worth it?
2. If i wanted something faster will amd processors's do? Or does that mean i have to get a new motherboard?
Here's my specs:
Dell Inspiron 560
Intel core 2 Duo CPU 2.93GHz 2.94GHz
4.00 GB RAM
(I have just installed a graphics card this Christmas "Sapphire Radeon HD7750")
-- The kinda stuff I'm using my computer for is gaming and It runs everything at a nice 60fps now, but its just a bit sorta bulky, everything is slow and freezing waiting in lobby's takes a long time before i join in ect.
So you can go Quad up to Q9400 for sure or Q9650 most likely, however cooling might be a issue.
Another thing to consider. You said that your RAM is ONLY 4 GB, it is too small for today games. I play Battlefield 3 and I notice (I have 8 GB RAM 1333, my signature) that BF 3 takes about 4.2 GB RAM, so this could be your freezing issue.
So I would advise, first to upgrade your RAM, simple and cheap. Since Inspiron 560 is sibling to Inspiron 570 (mine) I strongly suspect that maximum RAM supported is 16 GB (Officially only 8 GB), so you can use 2 RAM sticks 4 GB each, and if you so desire, you can add 8 GB more later.
If RAM upgrade is not going to solve your issue, CPU upgrade would be next.
Regarding Video Card - 7750 is the strongest card Inspiron 560 300 watt PSU can support, if you want stronger, you would have to upgrade power supply.