I have an entry-level Nikon DSLR, and I cant decide if I should upgrade my camera body or upgrade from a AF-S DX Nikkor 18-200mm to whatever else might be recommended?
I wouldn't spend any money, unless it is on books, training, or time! If you must spend money, I typically recommend first buying a wide aperture prime lens, but it isn't going to teach you how to take great photography, you already have all of the gear you need to do that.
I would recommend putting yourself in an environment full of friends/forums that don't encourage gear obsession(constant talk about dynamic range, buying the next gadget, high ISO noise, etc.) and instead drive you to take more photos, get feedback, and learn!
When your gear is what is truly limiting your photographic opportunities, you will have an absolutely clear understanding why and be able to answer this question yourself if necessary. Now is not the time. Go take some photos!
Glass tends to last longer than bodies, so I generally use a camera body as long as it meets my needs and invest in glass when I can. Then when I get a better body I have better glass that I can still use with it. If you are going to invest in glass I do recommend investing in glass that will work on a full frame body because chances are decent you may decide to move to full frame after you have a decent collection of optics.
So my short answer is upgrade the camera body when you need features in a new body that it doesn't have and invest in optics when you want to expand the capabilities of both your current and future camera bodies.
I will base an answer on assumptions:
So my take on it is this:
If your body is at least 10MP it is fine for making great 1-2mp (screen) and A4 prints 300DPI. If it is from at least anno 2009 the sensor tech is fine. Earlier than that , it is time to upgrade. Your camera is 10MP and younger than that, so you should only upgrade it if you need the new fancy features (that do not make better images) on newer DX cameras, or if you upgrade to a FX model.
A superzoom lens (18-200mm) is made for convenience and for point and shoot upgraders who wont sacrifice that convenience, but they do not make great lenses. I ti really hard to make a wide angle and tele in the same lens as it is two different design strategies. It will only be sort of sharp in a specific f-range.
So you should upgrade your lens to fast primes for better image quality, narrow DOF, and low light flashless shooting, fixed aperture standard zoom (approx 18-50mm F2.8) for convenient control, and approx 70-300 telezoom for reach.
For primes you can do a 24-28mm as a walkaround prime, 35-50mm for full body shots, 85mm for portraits.
If you like macro photography look for a 60mm 2.8 macro.
My view on buying/upgrading the camera kit is simple: you need to be able to explain why the piece of gear you want to buy will improve your work or allow you to expand what you do in areas your currently are struggling with because of gear limitations. "this is a better lens" doesn't cut it -- that's Gear Acquisition Syndrome.
Instead you really need to figure out how a piece of gear improves things for the kind of photos you're taking. Find yourself cropping because you don't have a strong enough telephoto? Good reason to buy a bigger telephoto. Starting to see how the kit lens is giving you soft images? Maybe then it's time for L glass; but until you can actually see the softness in your image, paying money for that lens is likely wasted because you still have a lot of technique work to do to grow into it.
@dpollit suggesting working on skills vs. buying gear is a good one. Upgrading your gear over time is necessary to improve as a photographer, but buying more expensive gear won't make you a better photographer or help you take better photos. Buying better gear should be a side effect of your maturing as a photographer. Don't upgrade until the gear you have won't take the photos you want, not because you want better photos and think buying gear will get that for you. It won't.
I don't know much about Nikon but in general I recommend upgrading glass or light first. Also the difference in quality between a wide range 18-200 to a prime or small range lens with a big aperture (smalle f-number) can be huge.
My suggestion is you keep using this 18-200 till you find it's limitations for you (this can be very different from person to person), read and learn about lenses, maybe borrow or rent one and then make a decision.
Again, I don't know about the camera you have but my advice would be the same for anyone with a Canon 500D, 1000D