1) Why a different dual-core processor rather than a Quad-core one? Would there be possible issue fitting it on my mobo?
The MB listed for your box is the Nvidia Geforce 6150, compatible processors are athlon64(3000+- 4800+), athlon64x2, and athlon64fx.all are dual-core. Your MB can not do quads unless you upgrade your MB.

2) How big of a power supply should I be aiming for? I'm still using the 300w it came with, but I know I need to replace it once I start upgrading stuff. Do you think the 550w you linked should be good or would it be more beneficial to grab a 700w or something? Also, on the power supplies, how do I go about making sure I end up with one that's going to fit my case? I made the mistake a few years ago of trusting a guy at best buy after mine melted and ended up with a power supply balanced on the top of my case - ran nice and cool though!

Depends on the video card/or cards u choose really. 700+ cant go wrong there. For size check the dimensions in your case, look up the power supply you want. specs on it should be listed.



3) As for ventilation, other than the new RAM, I'm running everything as it came from the factory - is a new cooling fan something I should be thinking about getting?

New fans couldnt hurt. Keeping it cool= longer life.