If building from the ground up, probably best to go with ddr3 memory. Just that the op already had the ddr2, so he might be able to save money. Personally, I'm an AMD guy, so I'm a little biased, lol. In all seriousness, at this point if I had the money and were upgrading, I'd probably go with the AM3 phenom 2 chip. I don't really know too much about i5, maybe other guys will know more, but the consensus seems to be that i7 is no doubt on the top of the heap, but that if gaming is what you want to do, there may not be that much advantage to the i7 chips. You just pay more.
Of course if you are doing audio/video encoding or something like that, the i7 might be better in areas like that, but real world performance, at least lower end i7 vs phenom 2, I don't think there is much difference. The best thing you can do is google and check reviews. But if it were me, I'd probably go phenom 2 to save the money so then you can get other, better components, for example more memory or a better video card, etc.