Graphics card is the current bottleneck for your system.
Radeon HD4670 should be less than $100 (excellent price/performance)
Radeon HD4850 about $150 (best price/performance).
Nvidia 9600GT around $100, 8800/9800GT about $120-130; both great price/performance cards as well.
Q6600 is a great CPU, even at the factory 2.4ghz. Unfortunately yours is installed in a BIOS locked preconfigured system. If it wasn't, your could easily overclock it to 3.3ghz on stock voltage and keep temps very manageable (mid-50s under 100% load) with a $30 aftermarket cooler like the AC Freezer 7 and some Arctic Silver 5 TIM.
Only way to get around that hurdle is to replace the motherboard which I can't recommend since it would mean having to buy another copy of Windows (OEM copies are tied to the BIOS of your motherboard) in addition to the hassle of essentially rebuilding your computer from scratch.