Would it be worthwhile for us to purchase the BahnCard to use whilst in Germany? We are still working out final details but at this stage we are loòking at 3 nights in Frankfurt - arriving by train from Lyon; then train to Dresden for 3 nights, then on to Berlin by train for 7 nights (including a trip to Potsdam) before catching the train to Warsaw. We would be eligible for the over 60 ticket. Am I right in thinking we could use this card for public transport in these cities as well as discount fares for the longer trips?

With just two trips, I don't think it's worth the hassle.
You save most the sooner you can commit yourself on certain connections and book the tickets asap (within the 90d window).
If you get, for example, Frankfurt-Dresden for €29, the Bahncard will just save 25 or 50 percent of that already low price.

Eventually you can end with a euro more saved or a euro more spent - but you need to compare it with the actual fares you can get on your days of travel.

You will get a so called CityTicket to finalize each trip by public transport in Dresden and Berlin.
But the BahnCard will not give you any discount for regular tickets or day passes with public transport in Berlin or for going to Potsdam.
In Berlin, you can get a 7 day ticket for public transport for €30.

For lots on German trains and booking your own tickets on line at a discount if soon enough check www.bahn.de/en - schedules and fares; www.budgeteurpetravel.com; www.seat61.com (great advice booking own discounted tickets); www.ricksteves.com.

If you do not want to pre-book and just hop any train check out the German Railpass which may also extend to Warsaw (not sure but does cover German trains to several places outside Geramny.

Oh, book those discounted low as 19-29 euro tickets at www.bahn.de/en ASAP. Make an optional seat reservation at same time as German trains are getting fuller and fuller.