Lets see here...
1. Do I also need to get another CPU (is there really that much difference between the two)?
Well, when dealing with a single cpu and a dual core, the dual core is a little bit more efficient compared to a single core. You will feel some performance boost based on the dual core you get. I did a quick search to find something that somewhat shows you a comparison and came across
this fairly large list. If you do a find(ctrl+f usually or in the edit menu of your browser) for the words "AMD Athlon 64 4000+" you will see where your existing processor is rated on their benchmark compared to the other processors. The higher up on the chart, the better it is.
2. Will I notice enough of a difference in performance if I bump up my ram to 3GB or even to 4GB? (The vid card will have 512MB to 1GB ram)
Is it true that a 32 bit processor will use just under 4GB. Do I need to consider the vid card memory in that total?
You have a 64 bit processor so your limiting factor is actually
the type of Windows operating system you have. If you are running with a 32 bit version of Windows, the operating system will only recognize up to 4 gigs of memory. If you had a 64 bit version of Windows XP, it could recognize up to 128 gigs of memory(overkill but depends on what you use it for). I know you are a teacher so I suggest looking into getting Windows 7. You should have some kind of educators discount that you can take advantage of since Windows can be a little pricey. You don't need an extravagant version of Windows 7 of course. Just make sure that when you install it, you install the 64 bit version. The more memory you have the better. I currently roll with 6 or 8 gigs myself but I can't check that right now since I'm at the office. For what you do, 4 gigs is probably going to be more than enough. I do a lot of multitasking at home and use memory intensive software so I doubt you need to have too much memory. More isn't always good but that's a discussion for another time. Memory is like adding a spice to food. Spice to taste. I can discuss more with you in teamspeak later pertaining to memory.
Video card memory is an interesting thing. I won't go into too much detail(plus I'm no expert on the subject) but here's a quick summary. Video card memory is for the video card to run smooth graphics for you based on the spec's of the video cards hardware and the demand of the game/software you are using. Typically, 512mb of memory is more than enough to get the job done for most of the games we see now days. Some games are a little bit more graphics intensive/speed intensive and require more calculations, thus prompting cards to require more video memory but 512 is more than enough for an MMO. If you plan on playing games that are a lot more intense and its not too expensive, get the card with 1 gig of video memory just to be on the safe side. Remember, it does help to upgrade to something that will last a very long time. No need to have to update every year at least. Typically from my experience, video cards will go a long way so you won't have to upgrade it every year.
3. Are there any fireproof robes for my conselor? or do I have to use the force on everything?
Stop drop and roll! Use the force as needed.
4. Are these the droids I'm looking for?
A picture better explains it.
I'm sure someone out there has better answers than I since I sort of typed this all up on the fly and didn't go into too much technical detail. Just tried to layman's terms it. Hope it helps or someone comes up with a better set of answers than I!