Depends highly on your current system and what codec you are editing. Please provide more details.
Editing primarily Canon DSLR footage. Current system is showing it's age and needs replacement... just can't decide if I should replace the video card or CPU/other hardware first.
AMD Phenom 9950 2.6GHz
ATI HD5870 1GB
8GB DDR2 memory
Win7 Pro 64
Production Premium CS5
Currently, I can edit DSLR footage at 1/4 resolution with few issues. It starts slowing down significantly when adding effects, though.
All decoding is done on the CPU. This is especially important when considering such computationally intensive codecs as AVCHD used by DSLR cameras.
I'd spend money on a good multicore CPU before worrying about the GPU.
To see what's done on the GPU, see this article:
Definitely upgrade the cpu to intel quad-core + hyperthreading (or better) before upgrading the video card.
In this case, I agree with Todd. Especially since you have an old-generation AMD CPU that's generally weaker than most Intel Core 2 Quads and an ATi GPU. And this has put you into a situation where you need to upgrade both just to get up to even par, let alone the top. If you can't afford both, concentrate on the CPU first. After all, a weak CPU will severely limit the performance of a high-end Nvidia GPU when it comes to video editing.
Though if you must keep your current old-generation AMD CPU, I recommend that you just get yourself a cheapo GeForce GT 430 or GT 545 for that system. Anything else is a waste of money for that system.
Thanks for the feedback, everyone. I took your advice and am going to upgrade the non-GPU components first. Sounds like that will work best for my needs. I'm leaning toward a GTX 560 Ti when I am able to get a new GPU.
A fine choice.