Phono Input or new Phono preamp?

My system includes two elements that are close to yours. The first is a VPI scout and the second are JM Focal Electra 936s. I can only tell you that I own bought the table and the Dynevector 20XH. I put it thru a Graham Slee Graham Amp 2SE made for MM. It has more than adequate gain for this cartridge. I can't imagine a phono input on an integrated that doesn't specify if the phono input is for MC or MM. If you choose the dedicated Phono stage the Graham Slee is wonderful but believe it or not there is a ton ofcompetition.
Since I am so happy with the set up that I recommend that you actually consider trying a tube power amp and a tube preamp. Note the Graham is all SS BTW.
Almost everyone who hears this set up finds it as good as I do. I also owned MF and using Chinese Monobloc tube amps Consonance Cyber 800s and a cheap little AES AE-3 with great 6SN7s. Turned my system in an unmitigated pleasure and I found my nirvana.
To answer your question however I recommend the 20 X HO and the MF's phono input first and take it from there.

I can speak from experience to one aspect of you post, having gone from a 20XH to a 20XM (1mv) Dynavector on my Scout some time ago. Sonically, the two cartridges are very, very similar. The XM may be a bit quicker and more detailed. The XM also comes with threaded screw holes that obviate the need for nuts on the underside of the cartridge, which makes installation a bit easier--particularly for a new vinyl adherent. Personally, I would not buy a separate phonostage JUST to go from the XH to the XM. I would, however, consider a separate phonostage to allow the use of a LOMC cartridge--one that will outperform either Dyna on your table. Though I have no experience with you MF integrated, I have heard the phonostage in the A5 and, while decent, can certainly be bettered by a good quality outboard unit. One thing you might consider is selling the MF, purchasing a very good quality integrated without phono on the used market for less than you sold the MF for and combining the proceeds with your $5-8 hundred dollars to purchase a good quality used dedicated phonostage. Though I have not heard the Classic, word on the street suggests it is a very good quality table and, it seems to me that the phonostage in your MF integrated will in fact become the limiting factor in your system. BTW, you could also raise additional funds by spending less on the cartridge--for example, the ATOC9MLII I'm using in my Scout is, IMHO, far superior to either Dyna you are looking at and can be had new or nearly new for $200-250. This would free up still more dollars for your phonostage and leave you with a fine turntable, good quality outboard phonostage and good quality integrated for about what you are planning to spend. It is really about finding the right balance and synergy in your system and connecting a VPI Classic/Dyna MC to your MF will probably provide suboptimal performance from your vinyl source. Just my two cents.

Generally MMs are considered about 5-7mV. The 20XH is about half the output of a 'normal' MM with just 2.8mV
A good example is the Goldring 1042 at 6.5mV.

My son uses the 20XH into a Whest Audio whestTWO phonostage and produces a far better sound than the setup going into an MM stage. He tried the Graham Slee Amp 2SE which the dealer recommended and although good, the extra gain which the 20XH needs (12-14dB) means you are not cranking up the volume on the amplifier. Someone on Audiogon recommended the whestTWO so we gave that a try. It is FAR better.
The 20XH like many high output MCs needs about 53dB to work properly. Also, if you want to transfer to your computer the extra gain is required for lower noise.

Personally I would go for the whestTWO and this from experience as a starting block for the VPI Classic/ 20XH combination as it far outperforms any MM stage and can be switched to match the 20XH.

It doesn't cost anything to start with the built-in phono of the MF integrated amp. Musical Fidelity has had a long appreciation for and relationship with vinyl playback. If it turns out that the phono stage is as good as I think it'll be, then for LOMCs you may want to get an optimized transformer instead of a whole new phono stage.

I also agree that there are some excellent carts for less money from the likes of Audio Technica and Denon. Get the capacitive load right, and the AT150MLX mm cart may make you forget all about high priced MCs and phono stages, at least for now. I'm astounded nightly by the music this cart pulls out of a vinyl groove.

Dear Fatgh0st: IMHO your KW500 is a lot better that what the people here seems to me they are thinking.

I agree with Johnnyb53, IMHO the best you can do is to work/test your MF KW500 with a good MM cartridge ( as a fact your unit was designed for use with with MM cartridges. ).

His advise on that Audio Technica cartridge is a good one and you have other nice alternatives too like Nagaoka MP-50 or MP-500 ( you can buy from LPgear. ) or the Garrot Optim from Garrot brothers.
IMHO any of these MM/MI cartridges outperforms the Dynas named here and could compete with LOMC ones.

Btw, the HOMC cartridges normally represents the worst of MM and LOMC worlds. I can't recommend a HOMC as a good alternative for you.

Regards and enjoy the music,
Raul.