Need your suggestion for PC upgrade

Hi friend,

My current PC is: E6850, 4G, 8800GT, the system is XP. it is built about 2 years agao.
When I play 5 SM, everything is fine outside the town. The fps for the main window is about 50.
But when I enter the big town, the fps is drop down to 5 or 10.
I hope to know this is the PC's problem? or Networks' problem?
If It is because of my poor PC, then which part is the bottolenet?
1. 4G -> 8G?
2. 8800GT -> better gaphic card?
3. XP -> win7 x64?

Or I need to replace the whole PC.......

Thank you for your suggestion

upgrade 1 & 3 go hand in hand, you need a 64 bit OS to see more than 4 gig of memory. I might think about that. Then I would upgrade the PC. All the parts are good but not great and nothing is so bad it would be a bottleneck by itself