Re: What do Insulate first?
The absolute best course of action is to get an energy audit. Call your utility company and see if they have a program that can provide you with a free or very low cost audit. It would be really nice if the audit included thermal images of your house.
The short answer is the attic, but that may not be the best for you. In a typical one story house, about 30-40% of the total heat loss is through the attic. In a typical 2 story house, the heat loss through the attic is less as a total percentage because the attics are smaller and the wall area is larger, as a percentage of floor space.
About 20% of your total heat loss is through infiltration and another 20% is lost through the doors and windows. A small percentage is lost through the floors. In his book, "from the Walls In" by Charles Wing, he noted that most insulation is like swiss cheese, full of holes. when people add more insulation, they often add more swiss cheese and never cover the holes, so they end up disappointed with the results.
It would be nice to know exactly where the heat is going so you could concentrate your efforts there. In most cases, the two things that give the greatest ROI (return on investment) are weatherstripping/caulking and attic insulation. Wall insulation is a lot more involved, therefore more expensive to install and the return can be a lot less. You might be better off upgrading the windows before adding insulation to the walls.