I am planning to upgrade soon.

Now, which is better? (in terms of performance *gaming*)

Intel Dual Core 3.4 Ghz

or

Intel Core2 Duo E6300 Processor - 1.86GHz Dual Core, Socket 775, 2MB, 1066MHz FSB, 65nm, 64-Bit, 3 Year Warranty

This is the specs that I am thinking of,

Intel Core2 Duo E6300 Processor - 1.86GHz Dual Core, Socket 775, 2MB, 1066MHz FSB, 65nm, 64-Bit, 3 Year Warranty

GIGABYTE "S Series" iG965 & ICH8 Express Chipset - Socket LGA775 @ FSB1066 - For Celeron D, Pentium, Pentium D & Core 2
2x PCI Express (1 x16, 1x1), 2xPCI, 4xDDR2-800, 6xSATA2 RAID, 1xATA100, 10xUSB 2.0, 2xIEEE1394, Gigabit, Intel GMA X3000 Graphics
8 Channel High Definition Audio, Features Gigabyte SPEED, SMART & SAFE Technology, Virtual Dual BIOS Support, mATX

Transcend JetRam High-Performance 1GB DDR2-800 240-Pin Module : CL5, 4-Layer PC Board, Life-Time Warranty

XFX nVidia GeForce 8600GT Extreme Edition, 256MB 128Bit, Dual DVI + HDTV, DX10 + OpenGL, Dual RAMDACS, SLI

Any comments?

The Core2Duo.
Who honors the warranty when Transcend disappears. Consider Corsair or Crucial.

Well, a friend of mine did some tests and he says that the Dual core 3.4 out performs the Core2Duo 1.8 upto 2.4, can this be true?

What do you think of the GFX card?

I question how he did the tests. Beyond that, the proof is in the pudding. Do various software installs show the difference.
There are many professional reviews online... Try www.tomshardware.com and www. anandtech.com among others

The Core 2 Duo is the better CPU.

Yep, conroe chip without doubt. Brilliant overclockers as well on gigabyte boards.
Agree with the comment about using Corsair or Crucial ram, good call dude.