I can't say which option you should go for. It depends on your budget and other concerns, eg. how fast the video conversion you want, etc. So I'll just list what each major component does in video editing and let you decide which one to upgrade.
CPU - Since most software video conversion and rendering are done here, the faster the CPU is, the shorter time it takes to get the job done. Note that the motherboard or FSB speed isn't a major factor here.
Hard Disk - Fast hard disk is needed only during capturing of video from camcorder to avoid frame dropping. So any hard disk with at least 5400rpm will do the job fine. Nevertheless, today's RAID-0 solution is quite inexpensive, I don't see anything wrong if you go for it.
RAM - At least 512MB. The amount of memory will affect the stability and smoothness of software operations. In fact, many video editing software require lots of RAM. The speed of RAM is not a big issue here, but again with the price of today's high-speed RAM dropping, it's not a bad idea to go for it. Keep in mind that you will need to get a new motherboard if you decided to switch to DDRAM.
CD or DVD Writer - Great if you want put your masterpiece on discs.
Graphics Card - Any decent one will be sufficient. It's nice to have a card with TV-out port so that you can view your works on a TV set during editing.
Sound Card - Either the inexpensive onboard or add-on is fine. You don't need a high-end sound card unless you're a pro working in a studio, I guess.
Monitor - Either a CRT or LCD with fast response time (< 25ms) should be used. Monitors with at least 17" display size are desirable as they give you more viewing area during video editing.
The above are just my opinions which I hope you find them helpful.
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