The liberal in me would want to make sure people don't have to live with totally unsafe installations while they save up for a complete re-install of everything. Instead, they should be able to upgrade incrementally. IMHO, a partial improvement now, and finishing later, is better than leaving it unimproved until later.
If a panel is being replaced, that is tearing out breakers. And I do think the AFCIs need to go in at this time on the circuits requiring them. As stated, there is the issue of shared neutral circuits still around. Tearing those out and redoing can get expensive. If the panel were in reasonably decent condition, I'd say replace the wiring first and the panel later. But if the panel is the thing in worse condition, and the home owner can currently only afford to upgrade one or the other, what would happen? I hope it's not "leave things unchanged".
