The ram has a bigger bang for the buck. It costs $250 to go from the 2.4 to the 2.8. Spend less then that (I paid $180) to go from 1 to 4GB (and I still have the 1GB to sell if I'd like), and you get a much bigger performance improvement.
My problem with the $250 upgrade from the 2.4 to the 2.8 is that is quite a bit of money for a small step up. To go from the 2.0 to the 2.4 costs $300, but it also get's you a much better video card with 128MB more ram, as well as a large HD. I don't see the extra $250 to be worth it for the 2.8. 4 years from now when I'm ready for a new computer I will hardly see the extra 400mhz making much of a difference to me.
That being said, if you have the money, by all means spend it on the 2.8. I had a budget and had to make due with what I had, so for me I saw 4GB being better then the 400mhz.