My current PC is about four years old, although I have made upgrades to it throughout its existence. The current specs are:

• (old) Intel Pentium D 2.80Ghz (32K L1 / 2M L2), Gigabyte 945GCMX-S2 motherboard
• (old) 2.5GB DDR2 (slot0: 512MB @ 533Mhz; slot1: 2GB @ 667Mhz)
• (new) HIS Radeon HD 4670 - I think this is limited by the motherboard not supporting PCIe 2.0 (?)
• (old) WD Caviar 160GB - pretty slow
• (new) WD Caviar Black 640GB

(if any more specs are relevant, let me know and I'll add them)

Now, on to my question. I've been having performance issues lately, both in video games and in intensive applications. A couple of examples:

• Android application development (running Eclipse and the Android emulator) is painfully slow (on Linux). I only realized this when, at my new job as an Android dev, both tools are MUCH quicker. (I'm not sure what CPU I have there)
• The guys at my new job got me NFS Hot Pursuit, in which I barely get like 5-10FPS, even with graphics options turned all the way down

My guess is that the bottleneck in my system is my CPU, so I'm thinking of upgrading to a Quad Core i5 + new motherboard + 4GB DDR3 (or more, 'cause I know you'll all jump and say 8GB minimum). Now:

1. Is that a good idea? Is my CPU really a bottleneck, or is the whole system too old and I should replace it?
2. I run Windows 7 on the old, 160GB HDD (which is on IDE, by the way). Could this slow down games as well? Should I get a new drive for Windows if I want to play new games?
3. I know nothing about power supplies. Could that be a problem / will it be a problem if I upgrade to an i5?
4. How come DiRT2 works on full graphics settings (pretty amazing graphics by the way) and NFS Hot Pursuit pulls only 5-10FPS?