Yeah that is kind of my plan
Yeah my system can handle it, it was the whole point when I built it

Upgrading path with parts that is good performance/price level when becoming obsolete was the concept. I can put the 146 up to 2.8, possibly even more but I feel no urge to play unsafe.
GPU is literally an abbrevation for Graphics Processing Unit and I used it incorrectly

I meant your graphics card. Basically all graphics cards (both Nvidia and ATI) you can judge on the second number of the model. Anything with less than x600 is poor for gaming.
x600 = average
x700 = good
x800 = top of the line
That is how a Nvidia 7800 card can outperfrom a 8600 and so on. It's pretty messy business to decide what to get. Best is just to read up on articles (boring but results in a good buy

)
Allthough it should be mentioned that each new generation brings new technology but that doesnt really matter if the card is too weak to actually show off the goodies in reality
There is more but this is the general rule more or less. With a less powerful graphics card you get more performance gain by lowering graphics. If your CPU/Memory is bottlenecking you usually get alot less performance gained from lowering graphics.