Graphics card, and monitor (if it can't do better than 1280x1024, that is). Widescreen ftw, which means LCD. IPS is nice, but it does cost more. LED isn't worth any extra cost, but if it's the same price, it
might be OK.
Then everything else. No really.
Everything. But only when you can afford it.
That's the trouble with PC upgrades - leave it a while, and you'll need to change just about everything. In your case, probably literally everything... except
maybe mouse and KB. Oh, and DVD burner or whatever. In fact, the hard drive's probably alright as well.
But a nice case helps, to securely and comfortably hold, and to cool, all your [other] new goodies. Like...
A new CPU will require new RAM, a new motherboard, and (just to be safe) a decent power supply. A good graphics card will definitely require a decent power supply. I really can't emphasise this one enough:
don't skimp on the PSU, whatever else you do. It would be the most disastrous decision regarding hardware you could possibly make.
As for CPUs, may as well go with Sandy Bridge. If you want to overclock, get one of the "K" types. I recommend the i5 2500K, unless you particularly want to spend even more. Oh, and you'll also want a CPU cooler, again if you wish to OC. Otherwise, you could do without, but they're still handy, and tend to keep it far more cool and quiet. And hey, you never know if you'll want to try OCing one day... But, once again, if you *do*, that power supply I've mentioned a couple of times? It had better be more than decent. Beefy, in fact. Same goes for the GPU - you can OC them, though depending on your choice, not necessarily to a great extent. But all OCing draws more power from your PSU. Worth keeping in mind.
Ahead of time. If at all relevant...
For the graphics card, it's all about your budget. The GTX460 is great value, as is the HD6850. If you have more to spend (and a monitor to make it worthwhile) the GTX570 and HD6970 are both excellent. Actually, if you buy an HD6950, the chances are, you can flash it to (just about) an HD6970 anyway, so that's another
very good option.
edit: But hey, what is your budget?