I didn't notice much of a performance migrating between Vista and 7. I suspect a fresh install of the latest patched Vista might help your performance issues.
If you are going to move to 7, think about just getting a new CPU/Mobo all together. The RAM will probably still work with some AM2/AM2+ Mobos. Yes, the 820 is a dog, but it should be comparable to a T2370.
But anyway as for your best CPU bet if you are in the states:
http://www.ewiz.com/detail.php?name=E6600&title=Intel-Core-2-Duo-Processor-E6600-2-4GHz-1066MHz-4MB-LGA775-CPU-OEM
I don't think the E6x50'w will work because of the 1333 mhz FSB.
Alternatively, if you are in the US, you can spend $340 for virtually a new quad-core system from the Dell outlet with Windows 7 which would be about the cost of the CPU+Hard drive+Win 7 and donate your old system for a tax write-off.