Price is a big issue, and your overall budget on where you expect to go is another issue. For me, I started by buying great speakers. They were a great deal, but it was the most expensive $2000 I ever spent. I had to constantly upgrade to get the most out of them. They became the stronghold--and everything (I mean everything) else was the weak link. In your case it seams simplier--you have good speakers and a good pre-amp. Your source is clearly the weak link. I also used a relatively inexpensive CD player as a transport and bought a good D/A (then a better transport--then a better D/A--then another better transport). So my advice would be: figure out where you want to go with the system--then it's easier to find the path. If you aren't concerned with the "future" formats--buy the best redbook CD player you can afford. I think the dollar value in single box designs is better than 2 box (unless you're like me and want the upgrade path of DAC-transport-DAC-transport) If you are concerned about the "future" formats consider a D/A that is fully upgradeable and then upgrade the transport that will accomodate that (as it becomes available). I know there are no DACs that do SACD (with the possible exception of Accuphase)--but some have the capabilities and will likely become upgradeable if that format really takes off. I have not invested very much in the future formats--I do have an SACD player, but it's not up to par with my CD playback system. It does have promise as being better, but until there's more software--I'm in the wait and see camp.
Order of importance
I recently upgraded my system to Thiel 2.2, CJ MF2200 and CJ PFR. I went back to using my old Denon 1520 CD player from a new DVD. I was told by a salesman that the order of importance in a system is 1)speakers, 2)source, 3)preamp, 4)amp. Therefore, I was told to buy a new CD or use the Denon as a transport and get a DA converter. Any thoughts on this and what DAC to consider?