What do I need to upgrade to make my system run WoW awesomely?
What make and model is it?
You can probably run it at 1024x600 or better on low settings. Look for gameplay videos on YouTube where people demonstrate the old GMA 950 Atom netbooks running different games; your laptop's graphics chip is at least that good (it might be a GMA 3xxx or 4xxx), and the CPU runs circles around the Atom.
If you want to upgrade your laptop, throw memory at it. The more RAM you have, the better. Unfortunately unless your laptop is the base model in a wide range, there isn't much else you can do.
I am also thinking of building a gaming pc if I do what would be the cheapest and best components I could go for?
Expect to spend around $500 for an upgradeable entry-level gaming PC. $750 gets you something pretty decent.