So here's the situation: I've recently installed The Witcher 2. And though I suspected it wouldn't run on Ultra, it only just runs on medium (barely). So I've been thinking on upgrading so I can run it on (nearly) max settings.  A friend of mine also bought The Witcher 2 and he can run it on Ultra. The only difference between our PC's is our Processor (see below): 
 
 My spec: 

• Intel Core 2 Duo E8400 (2 x 3.0 GHz)
• Radeon HD 4870 
• RAM: 6 Gb

•  i7 2700K (4x 3.4 GHz)
•  Nvidia GTX 360 (same quallity as mine)
•  RAM: 4 Gb

I'd say just buy a new rig tbh. There will never be another new LGA775 processor, so you need a new motherboard. And if you are buying a new motherboard, cpu, and vga you may aswell just go the whole hog and buy a new rig.

If you post your budget, and a reliable website that ships to the country you are based I/we can help you choose a new setup.

I find this strange. I have a "much lower" (not really) CPU than you, had the same GPU (I assume it's the 1gb version?), 2gb less RAM and i could run The Withcer 2 on high with 720p resolution with about 30 or less frames. I recently upgraded my GPU to a GTX 560 ti-OC edition and i'm currently running it in 1080p on high with about 60 frames.

I would say both of you have outdated gfx cards but I would guess his cpu is picking up some of the slack.

@FritzDude: The difference between 1280*720 and 1920*1080 is pretty big though.

                   

@FritzDude: The difference between 1280*720 and 1920*1080 is pretty big though.

                   

               

Replace the E8400 with a Q9550, that will more or less max out the CPU on a Socket 775 (I still run a Q9550). RAM is fine. I'd consider upgrading the graphics card as well. Possibly something like a GTX 460. This will more or less max out your PC. Honestly a Q9550 is perfectly fine in this day and age. PC Gamer suggested anyone still on a Socket 775 move on up to a 1155 but I think it's a bunch of bull. I run Crysis 2 and Dragon Age 2 perfectly at 1080 with a Q9550, 8gigs of RAM and a GTX280 (will replace when I have the money, keep on having issues with it and having to RMA it over and over again with EVGA).