Cost it out.

How many parts are you planning to upgrade? A new fork, for example, is a fairly big hit. Add a few more high ticket items and you'll be real close to the cost of a whole new bike. If you don't upgrade very many parts, you're going to wind up with an old bike that has a few new, upgraded parts.

A new bike, on the other hand, comes with all brand new parts. Every part was also designed to work with every other part so it's likely to perform a little better. A new bike also comes with a new bike warranty.

Cost it out before you start because, once you start buying new parts, every dollar that you spend makes it that much harder to walk away from what has become an expensive old bike.