Hmm, allright, I got it in 2006 so I guess it has had it's best time.
Well, the power suply is kind of the prob at the moment, playing Oblivion at medium settings has kind of been bad , so I'm going to replace it, bu tI have no idea of what they are going to put into it now.
Weak CPU? Hmm, that's a suprise.
Well, there is a second core slot, so I could make it a double core I gues.
Would that help allot?
The 8600Gts does sound lovely.
I'll look into it some more.

The power supply is a power unit box what powers your PC. You have to open up your case to find out what it is. Your statement on it is rather confusing...no one is going to put in anything unless you replace it. Open up your case and find out about your PSU. There's a sticker on it and you need to find out:
-brand name & model #
-amperage for +12V rail...may be more than one, so write them all down.
-wattage...this isn't everything.
The CPU is based on Netburst technology. It's made obsolete by many of today's chips (Core 2 Duo). Even when that chip was new, the technology itself was rather poor compared to the AMD Athlons at the time. You don't have a second core slot and I really am unsure by what you mean by that. This is your motherboard:
http://www.asus.com/products.aspx?l1=3&l2=11&l3=24&model=632&modelmenu=1
It only supports Pentium 4 CPUs and I feel it to be pointless to upgrade the CPU on this board because it's not worth it and you already have a P4 @ 3.2GHz.
Ok, so I did some price checking on the net and just got back from the largest/cheapest electronics store in town.
Here's what they've got that seamed reasonable on the list:
GeForce 8600GT ?129-Dx10-256MB Gddr3-
Radeon HD2600XT ?109-Ati Chipset-256MB Gddr3-
GeForce 8600GTS ?165 Dx 9-256MB Ddr2 (Available for around 150 on the Internet so that seamed fare)
The 8800Gt would be around 230 euro's on the net.
So, the GF 8600GT would seam to be the best choice from the shop.
I thought it was odd that the GTS didn't have Gddr3 and Direct X 10 compatibility...
But I am wondering, how much will the switch from a 512Mb card to a 256 card be noticeable?
Should I rather look for the 512 version?
In that case a website might offer better service.
There are no GDDR2 8600GTS as far as I know and they all have DX10 compatibilty. If there is a GDDR2 version, I suggest you avoid it because it will likely be crippled on the memory clockspeed. There are GDDR2 versions of the 8600GT, but that version should be avoided as well. The 2600XT is a decent little card for this game. Sits in between the 8600GT and 8600GTS. In other games, it will wins some and lose some to the 8600GT.
You still need to post specs on your power supply for me to make you a suggestion though, so get to it.
Also what country do you reside in? I can probably find you something cheaper at a reputable site.