@LocoLuke I would definitely recommend keeping your current graphics card if possible. From what I have seen, that 8800 GTS is pretty high on the food chain even now.
I would not bother with any upgrade short of a full mobo/CPU swap unless you are short on hard drive space or want to add Blu-ray capabilities since you can usually cannibalize drives from old systems to new ones.
That Core2 Duo is already practically obsolete, so an meaningful upgrade would require a motherboard/CPU swap if you find your current CPU too slow. If you get an Core i3/5/7, you should have a PC that you will consider zippy even a couple of years down the road. The superior memory bandwidth of a Core i3/5/7 over any previous generation CPU, eliminates or at least mitigates one traditional bottleneck in PC performance, and while you may or may not understand the technical stuff, you can see/feel the difference.
However, it’s not much more money and a lot less hassle to just get a new tower. Part of why I chose the one I did was the combination of price and the fact that is actually has an upgrade path. For instance, I could replace the Core i3–530 with an i5 or i7 in a couple of years and literally double my CPU power without having to replace any other components; an option you lack with your E8400 since that chip is already pretty much the top of the line in that family.
Don’t worry too much about RAM on an i3/5/7 system since 6GB of DDR3 is plenty for a Win7 system. That amount is pretty common in prebuilt desktops at least the ones I’ve seen, and rather inexpensive if you buy it separately for a DIY build/upgrade. That means more money for other things.
Or you could just keep your current desktop for now and save yourself a few hundred dollars. Up until a few months ago, I was running an old 3.4 GHz Pentium 4 and your current rig would drink that rig’s milkshake, so don’t feel like you have to upgrade. Just buy the laptop, enjoy the new range of capabilities you have, and stock up on Ramen like a normal college student :D
@lilikoi That is why Sager caught my eye so many years ago; at the time, they were the only people putting out inexpensive laptops. Note that I did not say “cheap”, since they actually were decent rigs.
However, now that laptops are more mainstream (everybody and their dog has one), the demand for low-price laptops that do not suck has changed the marketplace considerably, so Sager isn’t as good a value relative to their competition as they used to be.