[Help] Can't decide what to upgrade for comp

[stoneharry]

So yeah, I got about £600 and I want to upgrade my computer or buy a new one, either way. Here is my current specs:

Processor: Intel(R) Core(TM)2 Duo CPU     E6550  @ 2.33GHz (2 CPUs)
Memory: 2048MB RAM
Card name: NVIDIA GeForce 8800 GTS
Display Memory: 640.0 MB

Running Windows XP Service Pack 3.
I might upgrade to windows 7, either way that doesn't matter since I can get it free of my dad.

Basically my pc is slow at running the latest games now (gaming comp), some it can barely play. I'm assuming I need some more ram as I only have 2gig, but not sure by how much or whether it would be better to upgrade core/graphics card.
Also I'm using quite an old motherbord, not sure if it will be able to take anymore ram. I'm still new to computers and how they work, but I try to custom build them.
Thanks.

[Gripen2]

I'd say the Proccesor, but thats just me.
Oh, And RAM would be great too.

[Confucius]

Buy moar ram noa.

[Dombo]

CPU to an E8400 @ 3.0GHz and an extra 2GB of DDR-800 RAM