Your current motherboard uses LGA775 socket, the absolute fastest chip for this is the quad-core QX9650 which is about US$220 on eBay. This is good enough future proofing for a couple years, but if your board is still using DDR2 memory you might want to get a cheaper CPU for the moment and replace the entire board in a year or so. Capacity wise I would advise get another 1GB module on the cheap bring your total up to 4GB. Buying lots of DDR2 RAM is a waste as you can't continue using them when you upgrade to DDR3.
You should use a significant portion of your budget for a good graphics card such as the AMD 7850 as these can last you for a long time; you can continue using them on the new board as they all fit in PCIe slots. Of course, please also let us know your current power supply ratings (can usually be found on sticker at back or written as a big number on the side). You might need a new power supply if the new graphics card power usage exceeds what your current one can provide. Lol, so much new stuff.
Server chips are built for absolute reliability under 24/7 conditions. You will not be able to overclock them and depending on which motherboard it comes with (usually custom-made), upgrading other parts might also be an issue. Something to consider.
Cheerio,
Nicholas