The CPU is more than powerful enough, and 8 GB will be nice to have, but I'd suggest upgrading to a video card (opposed to using the internal Intel HD Graphics 2000 display interface). Something like a VisionTek ATI Radeon HD 6670 1GB.
I'd suggest seeing if you can move up to at least Windows 7 Professional from Home Premium for not too much extra. This page describes the different things included in the different variants: http://en.wikipedia.org/wiki/Windows_7_editions
And I also suggest NOT trying to save a few dollars on the monitor and get a good quality one. Your eyes will thank you for it. The term "HD" doesn't tell us anything useful about the monitor(s) you're considering. Perhaps you could be more specific? I don't know if you're hoping to get it all in one place (instant gratification), but I've had great luck over the years with Dell Ultrasharp monitors.