Upgrading anything besides your OS and your video card will get costly fast.
At 1680x1050, the best bang for your buck is the 6870. If you don't mind spending a bit more, you can get the nVidia GTX 560 TI 448 for ~$250.
Then, if you have a student email address, you can get Windows 7 Professional 64 bit for $65.
http://www.microsoftstore.com/store/msstore/pd/productID.216644200?Icid=Student_HUB_4up_Windows
and a SSD for your OS and the one or two games you constantly play, say an MMO. I'm apprehensive about a lot of SSDs. I only recommend the Crucial M4 and the Intel SSDs. 64 gigs, $85 bucks.
http://www.buy.com/prod/221150371.html
Right now, your GPU's probably your biggest bottle neck. Those three upgrades will breath a bit of life into your computer; perhaps enough to let you stave off a CPU upgrade for a while.
Then, you can start saving up your cash for the overhaul. A new CPU means a new motherboard, which means new ram and perhaps PSU, new heat sink and fan. Ivybridge is looming and while it won't make a huge difference in performance on the desktop unless you're using integrated graphics, it might just cause Sandybridge prices to drop as retailers try to get rid of their stock. Platter based hard drive prices will drop.
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