Most cost efficient upgrade for A3 speed increase on '07 iMac 24"?

I've read a bunch of posts on this forum on the "hardware upgrade" subject and I am trying to prioritize my options.
I have a 24" 2.4Ghz iMac7,1 w/ 3g or ram and the stock 320g internal drive. I have my A3 masters referenced on an external WD 1TB drive using the USB port. I am on OS 1.5.8
As I am shooting more weddings, the speed it getting unbearably slow, especially when using brushes on raw files (from a Nikon D7000).
I would love to simply get a newer machine, but the cost is just too much with a growing family. So I am wondering what will give me the biggest bang for the buck. Most of my info comes from references found on this forum including the excellent installation guide at amfiteatar.org
- Upgrade to OS 10.6 ($30)
- change ram from 3G to 6G (Kingston Apple 2 GB 667 MHz DDR2 SODIMM and Kingston Apple 4GB Kit (2x2GB Modules) 667MHz DDR2 SoDimm => total $130)
- change internal drive to WD Caviar blue 1TB $70)
Total: $230.
Does this make any sense? IS there a better path for this?
Thanks very much for any feedback.
Bo

Update.
I did the open heart surgery yesterday (replace original internal drive from 320g to 1tb and upgrade RAM from 3g to 6g) and it is a resounding success.
Overall speed in Aperture seems to have improved between 2 and 4 times. Particularly noticeable are the retouch operation with brushes.
So far the 6gb transplant is working without any hitch. After doing a lot of research on it, it seems like the key is to get matching sets of chips from a reputable vendor. OWC in my case.
So for about $200 and 2 hours of labor (not including hours of research on the net of course) this 3 year old machine has gotten a new lease on life. Definitely worth it!
In case it helps anyone else, here are the 3 most useful links I have found for this operation:
General overview of iMac HD and RAM upgrade:
http://www.amfiteatar.org/content/view/155/78/lang,en/
Video of HD upgrade:
http://www.youtube.com/watch?v=IN2vWKlDcdg&feature=related
Memory:
http://eshop.macsales.com/item/Other%20World%20Computing/5300DDR2S6GP/?utmsource=amazon&utm_medium=shoppingengine&utmcampaign=productads
Plus countless great info on this forum of course.
Thank you Frank and Mr Endo.
Bo
PS: Anyone with an answer of whether Snow Leopard would make a difference in A3 speed on a 07 iMac. Some people on this board say yes but since it is not a 64 bit machine, I would not think so.

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      PCIe Lane Width:          x16
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    If you have a FireWire hard drive connected, disconnect it before installing the update unless you will boot from this drive and install the update on it. Reconnect it and turn it back on after installation is complete and you've restarted.
    You may experience unexpected results if you have installed third-party system software modifications, or if you have modified the operating system through other means. (This does not apply to normal application software installation.)
    The installation process should not be interrupted. If a power outage or other interruption occurs during installation, use the standalone installer (see below) from Apple Downloads to update.  While the installation is in progress do not use the computer.
    D. To upgrade:
    Purchase the Snow Leopard Retail DVD.
    Boot From The OS X Installer Disc:
    Insert OS X Installer Disc into the optical drive.
    Restart the computer.
    Immediately after the chime press and hold down the "C" key.
    Release the key when the spinning gear below the dark gray Apple logo appears.
    Wait for installer to finish loading.
    E. If updating:
    Download and install update(s) 
    Use Software Update, or
    Download standalone updater(s).
    Once you then purchase and download Lion from the App Store consider this before you actually install Lion:
    Make Your Own Lion Installer
    1. After downloading Lion you must first save the Install Mac OS X Lion application. After Lion downloads DO NOT click on the Install button. Go to your Applications folder and make a copy of the Lion installer. Move the copy into your Downloads folder. Now you can click on the Install button. You must do this because the installer deletes itself automatically when it finishes installing Lion.
    2. Get a USB flash drive that is at least 8 GBs. Prep this flash drive as follows:
    Open Disk Utility in your Utilities folder.
    After DU loads select your hard drive (this is the entry with the mfgr.'s ID and size) from the left side list. Note the SMART status of the drive in DU's status area.  If it does not say "Verified" then the drive is failing or has failed and will need replacing.  SMART info will not be reported  on external drives. Otherwise, click on the Partition tab in the DU main window.
    Under the Volume Scheme heading set the number of partitions from the drop down menu to one. Set the format type to Mac OS Extended (Journaled.) Click on the Options button, set the partition scheme to GUID then click on the OK button. Click on the Partition button and wait until the process has completed.
    Select the volume you just created (this is the sub-entry under the drive entry) from the left side list. Click on the Erase tab in the DU main window.
    Set the format type to Mac OS Extended (Journaled.) Click on the Options button, check the button for Zero Data and click on OK to return to the Erase window.
    Click on the Erase button. The format process can take up to several hours depending upon the drive size.
    3. Locate the saved Lion installer in your Downloads folder. CTRL- or RIGHT-click on the installer and select Show Package Contents from the contextual menu. Double-click on the Contents folder to open it. Double-click on the SharedSupport folder. In this folder you will see a disc image named InstallESD.dmg.
    4. Plug in your freshly prepared USB flash drive. You are going to clone the InstallESD.dmg disc image to the flash drive as follows:
    Open Disk Utility.
    Select the USB flash drive from the left side list.
    Click on the Restore tab in the DU main window.
    Check the box labeled Erase destination.
    Select the USB flash drive volume from the left side list and drag it to the Destination entry field.
    Drag the InstallESD.dmg disc image file into the Source entry field.
    Double-check you got it right, then click on the Restore button.
    When the clone is completed you have a fully bootable Lion installer that  you can use without having to re-download Lion.

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