core2 ?1066Mhz? pretty sure 1333mhz is a no go.  E6700 runs at 2.0 Ghz.  BIOS 1.1.12 is REQUIRED

http://downloads.dell.com/bios/O3201112.EXE

Radeon® Xpress 1100 Professional Chipset

http://www.amd.com/Documents/Radeon_XPRESS_1100_for_Intel_Processors_Memory_Compatibility.pdf

I havent heard of this working on a 320 but on a 330 it does.

http://ark.intel.com/products/series/22818/Intel-Core2-Duo-Processor-E6000-Series#@All

it is posible to ugprade the cpu to a core2duo

Yes. I have a 320, and retrofitted it with a Core 2 Due E6300. You can buy such a CPU used on eBay for $5 or so.