Need help with upgrading

For my business I have a pair of mid 2007 iMacs running on OS 10.5 leopard. I have Parallels 5 running on both with windows xp, so we can use QuickBooks with the payroll feature (mac version of QB wont let you do your own payroll). I need to upgrade my system and i only see a few paths. Should I just upgrade all my software to OS 10.7 Lion, parallels 9, windows 7, or upgrade all software and some hardware upgrades (I was thinking maxing ram and a new ssd drive) or go a completely new rout and but two new PCs and remote connect to them through the iMacs w/ some OS upgrades.

Specs: 2.0 GHz Core 2 Duo (T7300), 250 GB HD, 1 GB ram

Well the first question that needs to be asked is "why" do you need to upgrade? I'm assuming you are hitting roadblocks running something as old as Leopard. Quite honestly your BEST solution would be to upgrade to newer models. Lion may not hold you over for too much longer, so upgrading the hardware in your existing iMacs may not make the most financial sense.

If you do insist on upgrading the existing hardware, plan on replacing your RAM (don't just add more... matching sets is best) with as much as they will take (6 GB according to EveryMac.com) and add an SSD. I don't know that you need to get the newer version of Parallels, but obviously do so if you have to switch to Win7 and If Parallels 5 won't run it.

EDIT: Parallels 5 does support Windows 7. So if P5 will run under Lion, there may be little point in upgrading Parallels.
Parallels Desktop 5 for Mac, Run Windows on Mac - Parallels Desktop Virtualization Software and Solutions

I'd say you're looking at around $450 in upgrades to nab the RAM and a pair of 1 TB hybrid drives. You'll struggle to get a pair of PC desktops at that price, especially if you are going to need attachments for both systems. If you're concerned about staying relevant for OS updates, this ought to keep you going through Windows 7's life at least. You may have issues with Lion and getting security updates. If Apple holds true to form, those will probably come to an end when Yosemite hits. But your iMacs should be compatible with Yosemite so unless you've got a reason not to, if you plan to keep using them, I'd recommend upgrading, at least to Mavericks.

The RAM is the main thing you need in order to get compatible with Parallels 9 and the new Operating Systems, though tossing in some hybrid drives will give you a boost to load times.

Good catch, Algus. I assumed jpmann was looking to upgrade to Lion because the 2007 iMacs couldn't run Mountain Lion and later, but I was wrong. They can, which changes things a bit. Upgrade those suckers to Mavericks!