I'm riding an 08 KHS Flite 100 too...so far I've changed the pedals, the chain, and the cog and I cut my steering tube down...next upgrade should be the saddle because it sucks (Selle San Marco Ponza LUX)...other than that it rides pretty smooth all stock...handling is a little twitchy/very responsive...the stock brake works well...

as for necessary upgrades:

definitely new pedals and saddle and depending on your terrain and riding style a new cog or chainring...everything else is fine as is and changing them is pretty much personal preference or needed maintenence...my bottom bracket started to click after a few months of riding up hills...