Replacing gears, what do I need?

Shimano 600!  don't hear that term used much these days (it became Ultegra many years ago).

yeah- easiest thing to do is just put on a 12-27 or 12-28 cassette.  You'll enjoy the extra edge.  It's an easy 'do it yourself' job.  All you need is a chain whip and a cassette tool, and you can pick up a decent cassette pretty cheaply, probably $30 or less.

Personally I would take the more difficult route and look at changing out the front chain rings.  the 12-25 cassette you have the back has decent spacing and getting smething with a 27 or 28 will likely result in some big gaps in your gears.   When you ride on the flats are you spending lots of time in the 53-12 combo?  How about 53-13 combo?  If not I would look at at replacing the front chain ring.  A "Standard" set up on a new bike is a 53/39 combo.  Depending on your spider/chain ring set up you might be able to just swap the 42 for a 39.  A Compact 50/34 may be even better.   The nice thing about changing the front is you will maintain closer spacing on your gears.

Compact vs. Standard is a touchy subject.  People get offended easily.  In general when competing in triathlon, spinning is better than grinding, so looking at a compact set up may be real solution.  I say this because you said you run out of gears quick.  Adding a 27 to the rear isn't really going to give you much more gearing.  However a compact 50/34 will give you lots of gearing choices.  I considered myself a cyclist before getting into Tris.   Being a "real" cyclist there was no way I was going to use a compact...I just needed to train more, because it looked "pro".  Reality is that I never used the 53-11, 12, 13 combo's except on long or steep down hills.  I was getting nervous about a hilly race and burning up my legs in the heat and at the last minute got a Compact set up.   Wow!!!  It was much nicer to ride with this set up.  Why was I such an idiot thinking that I needed the standard combo.  That said if you regularly fly along in the  53-12 on the flats (and you don't want to mess with changing out front rings) then you likely don't need any different gearing except for some more extreme hill climbing.  However, the truth is that except for really strong riders a 53/39 set up is usually to high.  Compact cranks are generally more appropriate for most riders (FOP riders excepted).  Just something to consider.

So much to think about.  Most of the time, I'm riding in the 53 ring, gears 17-25. Rarely do I shift up from that.  (However, lately my 53 ring is noisy from the chain rubbing so I usually stay in the small ring since it is quieter.)  Can I just take out the front 42 gear and switch it with say a 39? Can I go even lower like a 34 and get a hybrid standard/compact ratio going? 

How do I know if I can just swap out my 42 gear, as in what am I looking for on my bike that lets me know I can replace the single gear vs the entire crankset?

Also, if I decide to go compact, I need to replace the whole crankset right?  Is that it though, or will I need to get a new front derailleur as well? Any special tools I will need?

A 39- very likely.  A 34- heck no.  The issue with your current deraileur will be its total chain consumption. Limited by the length of the arm that those two little pulleys are on- you need to have enough range in the derailleur to accommodate your 53/25 as well as your 39/12.  That's only 27 teeth difference, which will work.  the older models I think are limited to 29.  the new Shimanos can do 32 teeth.

A 39 tooth inner chainring, methinks, would be a great idea.

x2 on the move to a compact based upon your typical ride gearing on the flats and your desire for gearing on the hills. I switched to a compact and have been quite happy. (I also moved to an 11-23 cassette for tighter spacing and a bit more top end, 50-12 vs 50-11, for the downhills.)