Guys (or gals) the original question posed was not belt versus direct. One technology is not better than the other. It depends on the table. Some manufacturers make both types. OP is talking about going from a good basic turntable to something better or upgrading a cartridge.
From my experience, the arm is most important (but I don't have experience as Mike Lavigne from bottom to very top of the market). It must be matched to the table. However, you want to look at resale value down the road. As someone who faced this type of decision, it is hard to sell a tonearm standalone and people like to buy known quantities. Years ago I had an MMF 5.1 and wanted an improvement. I was about to buy an arm, but was able to get a new table with the same arm for almost the same price (Rega, known fro their arm's high value). If I sold the MMF with a better arm, it would not have added the same resale value as the new table. All you Rega haters just please relax (especially Chakster). When I upgraded the Rega it was easy to sell in pieces because I upgraded the arm first (huge improvement) and then matched it to a table that cost about 80% more than the arm upgrade (minor improvement). I think up to $5K or so, get a table with an arm to match. So a table upgrade (with arm included) will yield better results than a cartridge.Then you can look at more complicated decisions.
Cartridge, as Mike Lavigne said is disposable. I wouldn't spend more than $1K, but that is me. Second most important is phono stage, which is not spoken about much, as one of the 4 main components. Not talking about Linn that breaks it down into a million pieces.
So, I guess cartridge is 4th, assuming your table is at the right speed with minimal rumble (sometimes a bd assumption). Also, you need to look at your budget. The question is how do I get the best improvement in SQ for my buck from a given investment. That is critical, otherwise you can go down a rabbit hole of upgraditis since there is ALWAYS something better of everything. Figure out your budget and go from there. Significant improvements cost significant dollars and the more you spend the more you have to spend to get noticeable improvement.
For a grand or two, I'd get a new table/arm. Then a new phono stage. Then cartridge to match the phono stage, assuming you are happy with your speakers and cables (oh no....you're going down the hole....)
