It is most definitely your RAM. I do not think that DDR2 33MHz memory is manufactured, the lowest clock speed is 400MHz. Given this, you might actually have DDR memory.
Regardless, your bottleneck is memory. If you have built your computer then you should know about your motherboard specs and be able to purchase a compatible higher clock speed memory type. Otherwise, check with your manufacturer or visit http://tinyurl.com/memoryconfigram and search your system to find the correct type of memory for your system.
I have a Q6600, GTX 260, 3GB of 800MHz RAM, Windows 7 and my system preforms well with all games at 1920x1200. Upgrading to Windows 7 does slightly decrease the idle memory usage but overall your system should preform just as well on Vista.
EDIT: Your clock speed is 333MHz though you claim it to be DDR2 but lowest frequency of DDR2 manufactured is 400MHz. Therefore, this could further decrease the speed of your system if the memory is actually DDR not DDR2.
EDIT: For 64/32-bit systems a 64-bit system will handle large amount of memory more effectively than an 32-bit system. The main reason to upgrade to a 64-bit system is memory management. If you are like 95% of computer users a 32-bit system that is limited to 4GB of memory is more than acceptable even for gaming. The speed increase of a 64-bit system is small if you have 4GB of memory or less. A downfall of 64-bit systems is compatibility and finding 64-bit drivers for your software can become quite a pain. So for your system 4GB of DDR2 memory is more than adequate.
EDIT: Yes, I would recommend buying new memory. It will mostly likely speed up your system to what it is capable of.