Pentium Dual-Core = 45nm (smaller die)
Core2Duo = 65nm (large die)
So the Pentium Dual-Core runs cooler, and has more room to O.C. than the Core2Duo. But less cache. Around 2mb.
The Core2Duo generally has a larger L2 cache. Around 4mb+
The Celeron Dual Cores have even less cache. Around 512kb.
Core2Duo is WAY OVERPRICED in today's economy.
The E3400 (a Celeron DualCore - in fact, the *only* retail Celeron Intel is pushing in the channel) has 1 MB cache, and is a cut-down E8400. The E3300 (one of two retail Celeron DCs to get booted out of the retail channel this year - the E1200 I replaced was the other), also had 1 MB on-die cache, and is a cut-down E8300 (like the E8400, a 45nm Wolfdale).
While both E8300 and E8400 did have 4 MB on-die cache, the Conroe-based C2Ds they replaced typically had either 2 MB (E63xx/64xx) or 3 MB (E66xx/E67xx).
The E3300/3400 were intended as a direct replacement for the 512kb Celeron DCs - primarily the E1200/1500; not just because of the doubled on-die cache and faster clocks, but both the Wolfdale-based Celerons support VT-x, which the Conroe-based Celeron DCs lack. Further, the E3300/3400 have better support for thermal management utilities than the E1xxx - and not just due to the better HSF, either.
You're right - C2D in LGA775 *is* considerably overpriced right now. In fact, basically it's under siege - E3400 from underneath, fire-saled/clearanced quad-cores from above, and then there's i-series (both i3 and i5) from the left (LGA1156) and right (LGA1155). And that's just Intel's own CPUs - I didn't even get into what AMD is doing.