I would say this is quite the substantial upgrade.
AnandTech - Bench - CPU
Check out the difference between the 940 and the 2500k. I couldn't find a comparison for the 3570k but you can add roughly 4-7% performance increase when comparing 2500k to 3570k. 8gb of ram should be fine. I would just go with 8 and put the other 50 towards a gpu. Have you considered the 7950 or even a 7970 since the recent price drops again?
Also I would say don't be afraid to use the BST section on this site. You can find some great deals as a matter of fact there is a 7950 or 7970 brand new in the box for sale at the moment.
Cheers
Are you from Canada? Do you have a store preference to order from?