Experts: Why is preamp important?

Kthomas, you are right, I am asking several questions. I am generally interested in what exactly a preamp does, then I'm more specifically interested in how important it is in my upgrade path. I now have speakers in my HT system that will do justice to my critical music listening needs, so I'm trying to figure out whether I should get an integrated amp, just an amp, or possibly separates. I have some space constraints that I may have to work around as well. My amp budget is probably $2k-2.5k (maybe 3k if value is there) and I will buy used to increase value proposition. I have listened to some integrateds that I love (Mac MA6500 and the Cayin H80a), but they are quite large and neither have HT bypass. I know there are workarounds to this, but it gets more complicated. Then I started to think that maybe spending the same money on just the amplification might render bigger improvement and also simplify the process (just going pre-out to the amp and that's it). That's why I asked the preamp question.

I may also consider upgrading source, currently Pioneer dv47a universal player. I will also be upgrading my Sonos unit, probably with a Cullen mod and mayber also a standalone dac, although the dac in the Pioneer rcvr is excellent, and compares favorably to what I'm getting out of a Sonos/BelCanto DAC2 setup in my upstairs system (older B&W matrix 803s2 pwrd by Acurus DIA100 passive integrated). So I'm tackling numerous issues and trying to manage budget as well. Hopefully this gives you a little more insight into what I'm trying to accomplish.

I'm running a somewhat parallel thread in this forum under another heading, but the same issue has now arisen. Am I wrong in my assumption that the pre-outs will contain the rcvr's processed signal? If I run that into another preamp, am I not getting essentially a "double processed" signal ultimately going to amp? Or does the last preamp clean up and control the ultimate signal to the amp? Dave: don't lose sight of my 2-3k budget. Assuming what I asked above is not a problem, is it worth splitting the budget to get lesser preamp and amp combo, or use it all on a really good amp now and maybe next year get a good preamp?

French fries: I'm a little slow on the uptick. Who do you mean by "you know who"?
Slbenz: your preamp improvement seems to be relative to a HT environment. Did you see equal improvement in 2 chnl sound? I didn't think the MCACC system (and it's equalization) impacted 2 chnl listening much, and not at all in "direct" mode.
To all: the question remains - am I "double processing" the signal using pre-outs to an integrated, and how much negative imapct will this have? Would I be better off with an amp switcher instead?