Upgrade dilema, help and advice please

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Hey all, i have been tearing my hair out over a possible upgrade, i have a 3-4year old pc that was got as part of the pc4home initiative and it seems to play games ok, the pc currently is as follows:

Fujitsu Siemens Sacleo T p4 660, 2gb ram, nvidia 8600GT, Sceleoview T19-2 monitor, it gets 3500 score on 3d mark 2006 (free version)!

Now the monitor only goes to 1280x1024, whereas the gfx card will go to 2560x1600! apparentl (on the box).

At 1280x1024 games look ok, i mainly play fps (cod4,hl2 and wow). So i'm wondering do i really need an upgrade, i looked at some hardware reviews (tomshardware and extreme-tech) and if i can see 2 possible upgrades.

1st upgrade - big budget (rough prices)
24" dell ultrasharp - £400
Intel i7-920 £210
Mobo for above - £150
6Gb corsair ram - £120
Nvidia 275 gtx - £150
Case - £50
PSU -£50
WD Raptor hard disk £150
Other bits and pieces (cd drives etc) £100

Total without monitor is close to £1000

2nd upgrade - biggest improvement for the £
22" Dell ultrasharp - £200
Intel Q8400 - £125
Asus P5Q - £90
4Gb ram - £50
Nvidia 260GTX - £115
Case £50
PSU - £50
Re-use old Hard drives and other bits.
Total without monitor is less than £500

Am i correct in thinking, no matter how good your system is, if you dont have a decent monitor you won't see it for all it's glory?
I don't want to buy a 22" monitor only to be wanting a 24" in 3-5yrs time, may as well spank the money now and go 24" now.

Any pros with thoughts / advice would be greatly appreciated.

Oh, i dont like to overclock, had some bad experiences a few years back with some AMD kit, hence the Intel route for this PC.
 
Woo, didn't even think about the samsung monitor, very nice suggestion. And overall price is nice as well. Thanks for the advice.

I was tempted with the WD raptor as i heard a few reviews saying it was the best / fastest for gaming (10k rpm) not sure if the difference would be noticable and if it merits spending £150 on it just for the extra speed. I am coming down with hard drives so wouldn't need any other one.

Is that motherboard one that has the tri-channel ram! (Even a phrase!?) i.e. could get 6gb ram in and working at a good speed, or is that only the i7 mobos?
 
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