upgrading the fork may not work with the older frames geometry. you could end up with a raked out fork and chopper effect.
you will kost likely more bang for the buck if you decide to go hardtail rather than FS. For the same money you should get better components, better frame material and, higher quality construction. That being said, it depends on what sort of riding you want to do. Also, I have never used a FS bike. I just upgraded my old hardtail to a new one by moving components over to a new 853 frame and used (but new to me) marz fork. It's no freeride bike, but its great for heavy technical xc.