[upgrade computer or videocard?]

I am using a fairly recent computer, but would still like to improve my SL experience. My current computer is a desktop. It has  an Intel i3 processor and runs Windows 7 as its operating system. The computer memory is 4 GB, and overall it provides fair quality for Second life. I was wondering if I should add a dedicated video card, or just upgrade the entire computer to an i7?

What effects SL most? Is it the computer processor or the video card itself? I was wondering if just upgrading the card could make a difference in even an older machine? My other computer  is running windows xp but I could add a video card to it so maybe that would boost its performance.

[Difference between an AO and a HUD]

I know this is a pretty stupid question to ask, but I'm confused on it. I'm relatively knew to SL, and I know what an AO is, but I've seen HUDs as well, and am not sure what the difference between the two are. Can anyone explain?