Go with a better monitor for sure. You can always upgrade RAM and odds are you might not even use the same RAM for your next upgrade. The monitor will last many upgrades, so it's better to buy better now. Your eyes will also thank you if you get a sharp monitor with higher refresh rates.
Besides.. I just pulled a stick of 256 out of a machine that I'm going to sell (had 512 -- 2 sticks of 256) and I can't tell the difference in performance for about 90+% of the stuff that I do. I even ran 3DMark2001 for the heck of it to see if my scores would suffer and they didn't even change.
BTW.. 19" monitors are great. They aren't that much bigger physically than 17" monitors, but they are a whole lot nicer IMO. I have a 21" and it's not that much nicer than a 19", but it's huge by comparision. 19" is definitely the sweet spot for CRT's IMO.
Last point.. RAM may make another nose dive in a few months and you might be able to pick up RAM for a song again like you could last year this time, so why not wait it out a little and see what happens?
Sal