Both options will help - hard to say which will help more. Depends if you are currently being limited by CPU or by video card.
Upgrade the CPU, and the 6600 would become your next bottleneck. Upgrade the vid board, and the CPU would likely be holding you back.
Either way, i would seriously consider adding another 1 gig of RAM as well as your planned upgrade. May require getting 2x1Gig sticks for dual-channel mode tho.
I used to have a Sempron 64 2800+ with a 9800pro and it ran ok. I decided to upgrade the CPU to a Athlon 64 3200+ as it was cheaper than splashing out on a better video card. The improvement was HUGE! Easily doubled my framerate. Mind you thats the crappy sempron for you and its tiny L2 cache. All that is moot now as my MOBO died a few months after that upgrade, and now im running a core 2 duo and X1950pro

You have XP pro? Perhaps you can use the performance counters to chart CPU usage in the game and see how much of a thrashing its getting???