Re: Which One: CPU or GPU
Assuming that your CPU is single core, i would upgrade to a dual core.
Though it seems like you are using an socket 939, so the CPU would cost quite a lot.
If you want to like max or play games on fairly high settings, i suggest getting a new mobo and CPU and some DDR2 RAM. Though i think it might cost about $250 total for good ones. (Board = $100, CPU = $50 or an 6000+ for $90, and RAM = $50 (estimates))
Your graphics card is alright, though i would recommend upgrading it later.
Desktop -Cooler Master NV690/AMD Phenom II X4 965 BE/MSI 880G-E45 Motherboard/2 x 2GB DDR3 G.Skill Ripjaws X/Sapphire HD 5870 1GB GDDR5/CORSAIR CMPSU-550VX/Seagate 7200.12 500GB (OS), Samsung F3 1TB (Storage)/Sony DVD Burner/Windows 7 Professional 64-bit