I am happy to say that for once my knowledge and experience can be of use. I upgraded both on my Sony Vaio which is my main machine and I can honestly say that BOTH make a huge difference, in their own respect of course. I had a 80GB 4200rpm and 512MB of ram to start with. The HDD was changed within a few weeks of getting my laptop and it's been a while but I can honestly say it makes a huge difference in game loading times, program loading times, and somewhat of a difference in PC startup.
Now onto ram, I recently upgraded my baby to 1GB of microDIMM ram. I held off on that stick of 512 because of the high prices, but I finally found a stick for cheap. What I've noticed; games DO run smoother, alot smoother than I would have suspected. I had my windows as streamlined as possible but despite that I DO notice the difference when I play UT2004 and HL2. Mostly in HL2 though. Firefox is another memory hog nowadays. I typically run 20 tabs so Opera is a much better browser in that respect as it doesn't use more ram when you run many tabs, but I still like Firefox. With 512 I had some lagging when switching between programs, and even sometimes switching between tabs. Not so with 1GB ram. Smooth as butter...well for the most part.
I'd say, start with a 7200rpm HDD, then move onto the 1GB ram. The 7200rpm drive is an amazing thing to have and it will only cost you a max of 10 minutes battery. In some tests the 7200RPM got better battery life than a 5400rpm seagate that was designed to use less energy than a 4200. GO figure. I can't find the review but it's out there on Google.
Hope this helps,
Emmanuel