new computer and upgrading sonar - suggestions

For clarity - you're looking for a new system, correct?  Or do you want to know about rebuilding your existing system?  Assuming you're looking for a new system, this could be a very detailed conversation - firstly - what's your budget?
 
Here are a couple thoughts to get you started:
- Are you planning on going 32 or 64 bit OS and DAW?  64 bit is the wave of the future and obviously gives you the ability to use more RAM, however you may have some 32 bit plugins which may not work well in a 64 bit DAW.  Most 32 bit plugs should be fine though - as Sonar includes a 'bitbridge' which allows them to function within the 64 bit DAW.  If bitbridge doesn't work properly , you could also use a third party 'jbridge'.  That said, you should do a quick inventory of your hardware / software / plugins, etc to understand 64-bit compatibility before making the decision.    
- Are you going to use this as a dedicated DAW, or will you continue to use it for other purposes as your previous PC?  I think many people will recommend trying to dedicate your PC hardware to DAW usage, or at least minimize other uses as much as possible - as other things, such as wireless NICs, etc could potentially cause issues.  
 
- CPU - clearly faster and multi-core is better than not.    This would likely be driven by your budget.
- Hard Drive - Using more than 1 hard drive is better (1 hard drive for OS and applications, another drive for data files and maybe a third for digital samples if you're using some sampler with high I/O - such as a drum audio workstation, etc).  You probably don't want drives slower than 7200rpm
- Memory - again, more is better, however given 64 bit OS and DAWs being the future - you likely want to consider a significant amount (e.g. 8gig)
- If you plan on running a Firewire audio interface - you'll want the Texas Instruments chipset.  You'll also want to research motherboard and video cards for support, drivers, compatibility, etc. 
 
- Most importantly - you can have someone custom build you a PC tuned for a killer DAW - Jim Rosberry is a member of this forum who's received rave reviews of his custom built audio workstations.  You may want to consider that option and remove many of the potential questions from the equation. 
 
Again - this is not meant to be comprehensive, but hopefully has given you a few things to start your thought process.
Regarding your question of how to transfer files - other folks may have more elegant solutions - however historically I've simply backed up my files onto a USB external drive, then copied them back to the new PC once everything was installed / tested.  Hopefully you'll have a backup copy of your data anyway.  The key factor is determining where the required data files are (e.g. the cakewalk projects directory, etc) to ensure you don't miss any files.
 
Hope this helps
Russ 
 

I am just about to upgrade once the funds come in to make it feasible.
I am running an XP quad-core system with 3GB of ram (which is LAME by today's standards!).

I get mine built by a shop in town, and they seriously do a fantastic job and take great care of their return customers.  If you know of ANY shops like that in your area, go talk to them.  Explain what you need the computer for and all that.  If they are any good and/or nice, they will tell you what you need and don't need and why.

I'm getting a 64-bit system because the system is gonna last me another 5 years (i'm hoping).  So 64-bit is coming on strong now.  I'm getting 16GB of RAM, 2x the CPU cores, and bigger hard-drives.  I was pondering a Solid-State drive, but I read that they tend to breakdown moreso than normal drives (could be BS, but their price is also a negating factor).

As for getting X1, all of my Sonar 8 projects have opened on it when installed on XP.  But that's not as old as S4!

Also, as the person above said... do a search of all ur software drivers and make sure they are 64-bit compatible or have a 64-bit version.  Same with your plugins.  64-bit if you can get it.