According to this page:
http://ark.intel.com/products/27466/Intel-Pen … GHz-800-MHz-FSB
The SL7E5 is a D0 stepping. Those run hotter / draw more power than E0 and later. You already have the chip, but if you notice a significant heat problem or you're worried about overstressing the motherboard VRM, then an E0 or later stepping would probably help.
If you're only concerned with older games and applications, then a Northwood (512KB) chip would probably perform better and will be cooler for sure.
Video card choice depends what era of games you care about it being able to play.
The 6600GT is good, but the 7600GS might be somewhat better in later games (that you may or may not care about running on this machine). My 6600GT was running very hot so I stopped using it. I don't know if they're actually hotter chips than the 7600GS or if it was just a heatsink/fan problem.
There are more powerful AGP cards but they tend to get expensive and might not be needed, depending what you care about being able to run.
I like the Radeon 9800 Pro family of cards, but they seem prone to dying. Apparently they need better cooling.
The "9" family of Radeons draws a lot of power from the 5v rail, while the "X" generation draws more power from 12v.
The X850 family cards might be pretty good, I don't know much about them. I think they lack some feature support that later XP games could require, but again you might not care about running those.