What IS the difference between CAT3/5/6 etc? is it just quality of manufacture or what?
Data transfer rates is the key difference. Have a look at the IEEE standards page for more info.

Gigabit for normal workstations is overkill as a machine doesnt have enough throughput to saturate the link. In addition you need at least 5e for 100mb. You should try to isolate the bottlenecks before throwing gear at the problem.
Exactly my point. Invest some time with a fluke meter to determine what's going on before throwing money at expensive gear.

--TH13