With the resolution on your 17" I can't see any reason you "NEED" to upgrade at all.
I have to agree with Jay2Tall though. A monitor upgrade (and then a GPU upgrade) will get you good performance, and a much better picture quality.
If you buy anything new today though, don't do 1680x1050. Go for an actual 1080P (1920x1080) monitor. The 1680x1050 resolution is quickly fading out as 1080P is becoming much more the norm/standard with HD content becoming 'more' mainstream these days.
You could get a GTX 260, or ATI 5770 to perform fairly decent @ 1680x1050 or 1920x1080 with most current titles.