It will not support an i7, it uses an entirely new socket type. The i7 is supposedly faster, though, but at the moment still expensive, and you may not notice any difference, especially since it is clocked slower.
You will need a new motherboard, but you have to make sure it is compatible with all of your other parts or you will need a complete computer replacement. Even if you do find a new motherboard with everything you need, it is difficult to replace sometimes, especially when found on stock computers, like brand name ones like Dell that weren't meant to be cracked open and modified. I would keep your Core 2 Quad, and if you want to speed it up, try to look for a Core 2 Quad faster than 2.8 GHz, but I'm not sure if there is a faster one at the moment.
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