For the most part, that is still a solid system, a little dated, but solid. If it were me I would try not to spend too much on components that cannot be carried forward to a new build.
First, try to overclock that CPU. A 6750 can run easily at 1600 FSB vs 1333, that would put it about 3.2ghz= free performance. Hopefully you should be able to do that without a voltage tweek, if you need a little more, bump voltage up .05V, see how it goes, keep an eye on your CPU temps. The stock cooler will hang in there unless you get really ambitious on the voltage. Mem dividers should work themselves out. I currently run an IP35-PRO with a 6750 in my HTPC build at 3.2, was at 3.4 when it was a gaming rig. The IP35-E and the IP35-PRO have the same power regs/stages (I think)and should clock about the same.
Here is a CPU support list to find out what CPU options you have: http://www.abit.com.tw/cpu-support-list/mb/intel_p35_ip35-e.htm
Videocard- Time for an upgrade. Fortunately this can be carried forward to a new build, so spend what you will. Decent gaming cards begin at about the $150 US range (GTX 460 or ATI6850) and go up to $500+ for the wild stuff. Frankly $350 US is more than enough to play what you want at any reasonable resolution available on a 27" and under single monitor (GTX570 or ATI 6970).
Memory- 2 gigs is about the minimum you need, but once again, any memory you buy cannot be carried forward to a more modern build. Try going to "Task Manager" and see what is running in the background. You can shut down a lot of behind the scenes stuff/programs (with MSCONFIG) without even noticing it, and in the process free up a lot of memory and CPU cycles.
Hard drive- your current hard drive is slower than the latest ones. How much it bothers you, I don't know.
Like I said, it is a fundamentally solid rig. I would hesitate to spend any real money on a new CPU as you can essentially buy a new Intel or AMD motherboard/CPU/memory for ~$250 and have a faster rig than anything you can build for Socket 775.
The above are just opinions.
I am a retired Ford tech. Next to Fords, any computer is a piece of cake. (The cake, its not a lie)
3770K @4.5, Corsair H100, GTX780, 16gig Samsung, Obsidian 700 (yes there is a 700)