Someone in another thread proved it was like 10x as bad if you ran multiple folders anyways, disk queue length was like 180 vs 10 for same folder; don't worry about wasting space on that, 1 per HD though might be nice if you can afford/want multiple HDs

Video Card, I'd suggest an nvidia 7900 minimum, 8800 preferably; 8600 SUCKS and is BAD and it should feel bad. I've not heard good things about the 9x00+ series either, and 8800 is more than enough for any game today let alone WoW

A 3rd gb of RAM wouldn't hurt, and I'm personally not fond of Vista, so that'd be your other upgrade route ;p As long as the first two are in the right colored matching slots their dual-channel SHOULD still work, while the third is just plain ddr2/3 ram.