Dual Processors will be advantageous to you if you do a lot of number crunching with software that can take advantage of the multiple cores. If your performing typical user tasks however you'll never reach the bottleneck from the processors but as everyone else has note from the I/O.
Until you have a sufficient amount of memory for your computer to use to avoid hard drive thrashing (when your disk becomes used extensively for temporary / swap space) put your budget there. If you feel you have enough memory then upgrade your hard drives. A lot of people are recommending SSD (solid state) devices though they are still pretty expensive.
A cheaper alternative would be:
Fast Dual-Core Processor, a good helping of RAM (4-8 GB depending on need) and a simple 1+0 RAID array with some mid-high disks (good 7200 rpm drives with a healthy cache). Investing in a cheap SATA RAID card would probably be a much better investment than a dual processor setup.
If your a heavy multitasker / use virtual machines heavily - get a quad-core processor.
Overclocking Intel CPUs will get you extra bang for your buck, the Core2Duo's (Merom) seem to overclock nicely, the Quads are a bit tougher. For blistering performance in a single application - the higher clocked Dualcore will most likely win.