I would pay off my credit cards and student loan. Sell my car and buy a reasonable new car...something like the new Lancer perhaps. Until I have a house where I will be driving more.
Then hold the rest until I find a job where I will then make some smart investments....actually with that much money, perhaps get into google stock as its expected to jump up quite a bit over the next year.
pay off the house(like everyone else is gonna say), buy an Evo IX MR, and take the remaining $500,000 or so and invest. If I could gain even a modest 7% interest, thats an extra $35K/yr