Upgrading the system's CPU wouldn't help much in games, and the RAM wouldn't either. It'd just help for multitasking programs and allowing for faster processing, but not FPS in games.
The best thing you can do if you want to have more settings in computer games is to buy a new graphics card.
The graphics card alone can boost performance speeds dramatically, and graphics cards are called GPU's because they are rather like CPU's but work in pipes to get faster processing than a CPU ever could.
To get better performance in todays games go for a Geforce 6600GT. This will increase frames per second (fps) alot and will allow you to shoot settings up farther. It should also run new games for a while. About £150-170 depending on the make.
Trust me, this is the best thing you can do at the moment
You definetly don't need to upgrade that rig to get better performance!