If you're going a new system, then save up for a i5 750, thats my choice. If you only want to upgrade to help your current system, then the e8400 is for you.
I can't justify going from a C2D/Q system like that (easily upgradable to an e8400 or whatever), for basically an entire new AMD system. Amd's fastest dualie (as far as i know) is the 550 BE, and it still runs slower at stock (again, as far as i know), than the e8400. Its more comparable to the e7400 at stock clocks. And the e8400 will see a larger OC.
So i definitely say the e8400, the extra juice shall feed your card quite well. And a mild OC will see a few more fps here and there too =).
Oh and with the i5 thing, wait that out too, buy your e8400, then later on if you still only desire dual core, the dualies are coming out soon for the i5, some with HyperThreading if I remember correctly, so keep an eye out for those.
Again this is all my opinion, so do whats best for you.