Ya that's the highest I'd be looking. Overclock that CPU. A gigabyte P35 mobo, assuming it's a decent one (not familiar with yours) will get that CPU to at least 3.3Ghz. Just get a CPU cooler that's better than the stock one. What's available to you cooler wise?
I'd say at the highest go for the 560. Honestly I think your system will be bottlenecking that card quite significantly. I think you'd be better matched with a 460 or 6870 both of which can be found fairly cheap now. The 6870 is faster and more expensive. Don't know how much of the faster would really come through.
Do overclock your system because you could get as much as 30% more out of it easily and that's pretty good. If you don't know how to do it, read the 'overclocking your core 2 duo / core 2 quad' guide, which is on the front page of the website in the articles.
