I wonder if it's better to spend the extra $100 on an i7 2600k instead of a nicer video card?
Definitely not !
Most current games still use only 2 cores. Skyrim only uses 2 cores.
There are more and more games coming that use 3-4 cores. So unlike 1-2 years ago, it is now wise to get a 4-core CPU.
There are no games (afaik) that use 5 or more cores. None what so ever.
A i7-2600 has 3 advantages over a i5-2500.
It is 100 MHz faster. Note, at 3.5GHz, that is only 3% faster. You won't notice it in games. Check benchmarks, they all confirm that.
i-7 has hyperthreading. That means you can run 8 threads on the 4 cores.
i-7 has 8MB of cache, in stead of 6MB cache.
Two issues here:
1) No games do more than 4 cores. Complete waste of investment for gamers.
2) Even if games would use more than 4 cores, the hyper-threading would only increase performance by 20-30%, not 100%. Cores are shared between 2 threads.
So basically you'd be paying 100+ dollars/euros for just 2 extra MB of cache.
Not a good investment.
If you want better performance in games, your videocard is most important.
I only recommend it i5-2500k (and soon i5-3570k) because they are have such awesome performance for 200 euros/dollars.
Example, I recently bought a gtx680.
But my CPU is a E8500 (that's a 3.1GHz cpu, but over 4 years old now).
The E8500 is the bottleneck now.
But I kept enabling more and more eyecandy in Skyrim. 8xMSAA. Transparency AA (4xSSA). I started using SSAO (Ambient Occlusion, I love it). The high-res texture pack. Etc. My fps is not so high. But it is almost the same as my fps without all those features. I check gpu usage (with nvidia inspector). When playing, both my CPU and GPU are running at close to 100% utilization. That means that with all the eyecandy enabled, the GPU is so busy, that the CPU isn't holding it back ! Just to show you that GPU power is so much more important than CPU power in games. Even in Skyrim, where everybody (used to) yell that it was CPU-limited.
(Of course, I am buying a new Ivy Bridge i5-3570K myself next week. The E8500 was an excellent choice for a gamer like me 4 years ago. But even then, its time has come).
So if you have more money to spend, spend it on a videocard.
I recommend the gtx560ti (or a AMD 6000 series) because they are around 200 dollar/euro. And do very well in games. Spending more money on videocards will give you less extra performance for your buck. But if you have the money, that is where you should spend it.