Tips for gradual upgrade

Home configuration and finances (two daughters in private colleges, egad!) dictate one system for music and HT. Right now, my system is probably a little out of balance, with speakers (Dunlavy SCII mains, SCIAV's for center and surrounds, Vandy sub) probably a notch above the Rotel electronics (RSP985Pre/Pro and RB985 100w x 5 power amp). Sources are a Music Hall MMF7 tt through Grado phono stage, Rotel RCD991, and a Pioneer Elite DV47 DVD/SACD player. Cabling is Cardas (CD interconnects, speaker wires), Kimber (DVD interconnect), and Audioquest (basically everything else) Racks are Billy Bags. One other challenge is that we have a big honkin' Mitsubishi TV stuck between the main speakers.

Listen to jazz, female vocals, classic rock, alternative, some classical -- about everything but rap and country. Sound is pretty solid (fast, tuneful) now, but will soon be able to think seriously about upgrade as kids are getting through w/ college. May not be able to go to full separate system, but was wondering where money would best be spent to upgrade in this footprint. Leaning toward tube preamp like a VTL to improve imaging and soundstage for more serious two-channel listening. It has advantage of theater-throughput circuit to maintain HT flexibility (admittedly less of an issue with kids moving on). Would also like to look at something like Ayre to upgrade main channel amplification. Have also thought about BAT, but not sure their pre's have theater bypass feature.

Also thought about going to flat-screen display to not only upgrade picture, but also get that big, black reflective box out from break-up-the-soundstage position. See what the current rig can do w/o that challenge?

Eventually, something to replace the RCD991 CD would probably be on the list as well, but that seems lower priority than the amps, etc. Final idea would be to replace the one Vandersteen HT-style (line level input) sub with two Vandersteen subs (I believe there are ones that take signal from power amp and are more tuned to two-channel music apps.)

Wonder what you more experienced 'Goners think about this upgrade path, and WOULD REALLY APPRECIATE any other suggestions. Thanks, and happy listening!