I'd say no DDR2 doesn't offer a huge amount of performance increase over DDR. DDR2 offers twice as much bandwidth but suffer high latencies as a trade off, if you are looking to keep your machine for a while then definetely get 2Gb DDR.
If you are not ocing the the OCZ EL Platinum 2Gb Dual Channel kit is quite cheap and has low latencies at stock speed.
Another solution is to get a C2D ready motherboard and DDR2 RAM and keep your CPU and GFX, so you have DDR2 and can upgrade to new CPU anytime.