If it were me, I would upgrade your system memory to 8GB and I would upgrade to a GPU w/ 2GB or more of VRAM. I personally lean towards Nvidia, so I would get anywhere from a 660ti to a 680 depending on your budget. My motto is spend big the first time so that you don't end up upgrading every 2-3 years and you'll never second guess your purchase due to performance. Here's an excellent option that would help you tackle ultra (w/ a system memory upgrade):
http://www.newegg.com/Product/Product.aspx?Item=N82E16814130785
My Rig takes on High settings (w/o AA and motion blur) without lag - I have an FX-8150, Nvidia 560 (2GB) & 16GB of RAM. I am upgrading my GPU with tax money this year (probably a 670 or 680 depending on what deals are available) so that I can play on ultra but I am overall pretty happy with my experience.