When I started guitar I got one of those cheap guitar and amp bundles. I'm going to probably get a new guitar so I don't sound so bad! If i've got a cheapo amp am I going to need to get a new amp to get a better sound or will a decent guitar be enough?
A bad guitar through a good amp sounds good. A good guitar through a bad amp sounds just like a bad guitar through a bad amp, really. The amp affects your tone much more, so you should look at upgrading that first. What sort of music do you play, and what would be your budget?
I mainly play classic rock and some metal and blues rock. I could probably spend max £600 on amp and guitar but preferably something cheaper.
that guy is right, even if you have a brilliant guitar it will still sound real bad through one of those little cheapo amps. i reckon you should upgrade your amp first too. the roland cubes are a pretty decent upgrade of you ask me.
So after i've got a decent amp will a good guitar make that much difference? (sorry i'm such a guitar noob!)
It will once you've got a good amp, yes. With that budget, you could get a good valve amp, which will serve you a lot better than a solid state one. You'd be looking at about 30 watts. Perhaps the Laney VC30 112 combo might be worth looking at, though it can't do metal without a pedal. It's still a great amp, though.

Edit: What sorts of metal do you play?

Also, the Peavey Classic 30 might be a good amp for what you want. Again, it'd probably need an overdrive pedal or something to do metal, but it can handle rock easily on its own.
^thanks Do you think that could do small to medium gigs well enough?
I play mainly old-school metal like metalllica, megadeth and sabbath. Though im more interested in playing classic rock.
Yep. A 30 watt valve amp should easily be capable of that. As for those styles, you'd probably easily be able to get those sounds with one of those amps and an overdrive (or possibly without if you get the settings right).
30 watts is alright for small venues...but it wont matter if they mic the amps up. so 30 would do if they mic`d them using the PA system etc