You know, the operating frequency of your CPU can't tell us everything about it... Run CPU-Z and tell us the L2 Cache amount and such. Also, what GPU do you use? UE3 is CPU oriented, sure; doesn't mean the GPU's just off in the corner having a wank.
But from what I understand now, I don't think it'll run too nicely on better settings. What res do you play at?
Additionally, changing your CPU is easy as moving your arms and using a screwdriver. If you bought a pre-built (lol) computer, then the motherboard may not like the new CPU, if it runs at a higher FSB or is a smaller fab size than the original one.