If all you’re doing is playing games, then single core is fine. There is very few situations (at the moment) where duel core will benefit people.
The bottom line is: if you dont know why you need duel core, then you dont
As for upgrading: AM2 comes out in a few months, but just keep in mind that it will cost a premium. You'll also need DDR2 RAM. Then remember that any bugs will have to be ironed out in the new hardware.
Personally, id go with a mid/cheap mobo and a opty. Your not going to be spending loads , but getting a huge boost. Plus you'll be able to sell them for a reasonable price later on too
XP120 is a fine cooler . Im using the XP90 and are well happy with it