IMHO, the best upgrade for the a1200 (excluding the compulsory 060 accel) is a zorroII busboard + zorroII RTG card... this will transform your amiga experience.... but it will cost you :-D
first u need an accelerator, some fastram, HDD/CDROM, a suitable tower and the RTG itself... it will cost, but will worth it... :-D :-D :-D :-D