I have a 2500+ running at 2 ghz(a wee bit modified

) and it runs pretty good ,but I'm probably going to have to update my CPU some time soon ,but I'm surely going to use AMD because I have been using them since forever.I'll also have to change my MB sadly , because they don't make any better slot A cpu's

The 3700+ is a good CPU and will probably be so for some time ,so you should buy it if you want .As long as you have a good card to back it up+some good RAM ,you have no real problems!My suggestion for you would be ,if possible,to get one more Gig or RAM ,just to save some money later.
There aren't too many games that run on 2gig RAM ,but having a good amount of run helps your game run a lot smoother than you think.
Having double the RAM I previously had did miracles for me with TESIV:OBLIVION .