You're just in line with the recommend requirements for those games you want to play. If I were you I'd wait on getting a new cpu until at least May. The c2d processors' price should come down by then. As for the GPU, again I'd wait. When the DX10 units come out the higher end DX9's will go down. If you seriously want to upgrade right now, I'd buy another gig of RAM and call it a day.
You can play the games you want to play. Just dumb down the settings a little bit until you get a better GPU. Save your money for right now and when the "next big thing" comes around, take the money you saved from the price cuts and treat yourself to a 19" LCD.