Yes, better performing CPUs perform better by definition. But was that really a bottleneck? In other words, did the i5 get 50 fps while the i7 got more than 60 fps? Were any games unplayable with an overclocked i5 that suddenly became playable with the i7?
Pure percentages are misleading. For example, my old E2180 at 2.8 ghz + 8800GT got 120 fps with the source engine at 1680x1050 when a xeon 3210 at 3 ghz
got 140, a hefty % improvement. But was it bottlenecking me in T2? Not really.
On a strict budget I'd still pick a 5850 and an X3 CPU over say a 5770 and a faster quad core intel CPU. Ideally I'd get what you recommended; but that build doesn't fit under 1k when you add in an OS license, monitor and keyboard. When you have to compromise to fit a budget the CPU, psu and case are the only places to look.
And finally, the 5850 gets over 100 frames/second in SC2 at 1920x1200. The 470 is not on that comparison as far as I could see. While it *could* perform better I could argue that the difference between call it 120 fps once the 5850 is overclocked and even 100,000,000,000,000,000,000,000,000 fps is not significant on an LCD monitor limited to 60 fps in the first place.