I'm having trouble picking the right time to upgrade my computer... namely my CPU and Graphics card... Should I buy the most expensive thing now? Or something top-notch, but not top price... Should I also get Ci7? or the lesser CPUs like Ci5 or Ci3?
The thing to remember is that no matter what you buy, the 'next big thing' will come out the next week. Just go big and be happy with that rig.
My budget is $150-200 for the graphics card... and $200 max for the CPU... So ultimately I want to spend somewhere around $300-400. But considering how Graphics cards come out every month with "breathtaking, and groundbreaking new features" I really don't know when the technology will be peaked for a while... Also heard Ci7 is not as good as they make it out to be?
At those prices, you will be looking at mid-range parts, you can't get an I7 for less than 280. Buying now isn't bad, because prices don't roll off nearly as hard for a midrange part. The E8400 I bought almost two years ago has dropped about ten bucks in that time. Honestly AMD is probably your best bet given your budget. Also, you haven't mentioned your motherboard and I'm hoping you are aware that you will likely need to fork over 50-150 dollars depending on what you decide. (Unless you already have an AM2+ board) If you are a gamer, or a folder, I would get a 3ghz phenom ii x4 and a GT465. If you go i5, get a 5770 or a gt260 if you can swing it.
Choosing which computer to upgrade depends on how often you are able to purchase a new one. You get more value for your money if you choose to spend less and upgrade more often. It's because (if you believe in Moore's law) the performance of computers vs price doubles every two years. At time of buy, the performance/price ratio is linear (at best). So, you get more value if you spend $1K on a computer every 5 years rather than $2K every 8 years.
If you're upgrading your CPU, you may also have to upgrade your motherboard and as a result, possibly your memory. You may also have to consider upgrading your power supply as well, but not necessarily.
If your not much into gaming you can just throw Ubuntu Linux on an old machine and it will run like a champ for everything you need.
Something else to consider...3D gaming rigs are coming out now. I have a friend who saw one and was blown away, and put one together. He's a single guy with a lot of disposable income, but he's really into that scene and says we should see a lot of these 3D rigs by the end of the year, which means lower prices. Note- you'll have to buy a new monitor.
To me, it depends on what u do with your cpu. I own a small trucking company and I have the same setup since 04,lol. It do what it do and I'm cool. When i was younger and worked at best buy briefly, i had to upgrade all the time seems like, but now, I'm good..