the best bang for your buck cpu seems to be the i5 2500k as of right now. AMD is supposed to be releasing some new cpus based on the bulldozer architecture Q3 of this year. But they might delay it and it may not beat a 2500k in terms of real-world performance.

I would assume a I7 2600k would help with multiboxing seeing as how it has hyper-threading and a 2500k does not, but you will have to pay an extra $100 for the 2600k for a small performance gain over the 2500k. I would go i5 2500k if you are looking to upgrade on the cheap with performance matching and even overtaking last generation of cpu's most expensive I7 processor the i7-980X.

As for which is better a dual-core or quad-core, it used to be a dual-core was better for Wow back in the day. But when wrath came out, Wow was updated to take advantage of multi-core cpus. WoW is still treated as a single-threaded app from what i read, but WoW can take some of the load and split it between the other cores and this will cause less jerky play and better performance.