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Personally, I get way more use out of our nice Calphalon pans than I do out of the knives. I use the pans pretty much every day to cook, but the knives I tend to use a lot less often. Maybe because I'm not good about cooking veggies, so there's not often a lot of things to chop. We also avoid using our nice knives unless we need to, because they're hand wash only. So we use our cheap ikea steak knives all the time because they can go in the dishwasher.

I would say knife set!! We have the stainless steel Calphalon set of pots and pans, and I always try and use my cheap non stick pans first! lol they are soo much easier to clean.

A good knife set though, helps sooooo much!!!! I use my knives everyday!

I have a decent set of pots and pans from Costco (Kirkland Signature line), but I decided to invest in quality knives. It will really make your life that much easier to have a knife that can cut well. Every time I go to my in-law's house and attempt to cook, I get mad at their knives. I would recommend Henckels or Wusthof. I find them at T.J. Maxx and Marshall's for a good price. The last set I bought was from Amazon.

I don't think you need a whole set of knives. It's probably more useful and a better deal to buy just what you need.

I have a Global chef's knife that I use all the time along with a paring knife.

That's what we're doing too - upgrading what we have to better quality. We've started with pans because I have no clue what's going on with knives. I need to work on learning the proper knives for the job.
I have a cast iron pan that I love, and an All-Clad 5-ply SS saute pan that is my favorite kitchen item. Next on my list is an enamel coated dutch oven.

good knives can be crazy $$$$, but cooks illustrated highly recommends victorinox knives and they are really reasonable. i love mine! do you have a block you can use? this set is <$80 and you could have 4 good knives and $$ left over to get the pans you like. i had a couple nonstick calphalon fry pans, they didn't last long for me & now we have a cuisinart green gourmet non stick pan because i get nervous about nonstick. the rest of our pots and pans are cuisinart & we are very pleased with them!

http://www.amazon.com/Victorinox-4-Piece-Knife-Fibrox-Handles/dp/B004IEBTZ4/ref=sr_1_2?s=kitchen&ie=UTF8&qid=1381333972&sr=1-2&keywords=victorinox+knives

Definitely knives!! We have nice knives and it makes a huge difference.

Personally, I'd want a nice chef's knife and upgraded pots and pans that you use most. I use our chef's knife for pretty much everything but bread. I mostly use 10 in omlet pan non-stick and stainless 2 quart sauce and 3 qt saute most.

I don't think you need a whole knife set. Well, I should say, *I* don't need one. I really only have a chef knife, paring knife, bread knife, and santoku knife. A nice pair of kitchen scissors is also helpful, but I haven't bought one yet.

I also bought all my pans separately and they are a hodgepodge of quality brands in different materials. Sets always come with pots that are rarely used and all the same material, so I only have pans I use constantly.

So, to summarize, since I tend to ramble - I would get two or three high quality knives separately and maybe a great le creuset dutch oven. You get the best of both worlds. You can "give" him the knives, and he can "give" you the pan.

you can get a couple of knives pretty inexpensively. Really you just need a chef's knife and paring knife.

so buy those and get one great piece of cookware.

Personally, I would choose to upgrade maybe 2 knives and 2 pots/pans instead of getting a whole set of either. 8" chef's knife or a Santoku knife would be my first knife picks. And a pot and pan you would use the most often. You'll get more use out of your upgrades that way I think.

My vote is for knives. DH and I still maintain that our Henckels block set was our best wedding gift because of use and quality.

If you decide to buy knives and pans, I would get a couple of Santokus in different sizes.

@loveisstrange: I say knives because they'll be much easier to pack for the move back to the states!