Tires are so far out in front for my #1 upgrade choice that there isn't even a second place.
A set of slicks will be faster and easier to pedal, handle better and are quieter. I'm not a fan of super skinny tires either. I'd get something in the 1.5" to 2.0" range. They'll allow you to use lower air pressures for better ride quality without increasing rolling resistance. You can also save significant weight with tires, but the lighter ones cost more and probably won't last quite as long.