UPGRADE TIME!! Preamp vs. Speakers???

Ok,you got it,here goes.......why don't you do both?!!!! 

Do it! Do it!

Changing the speakers will make the biggest difference in sound.  I would start there.

My experiences suggest changing the weakest link will make the biggest difference in sound. I recently changed from an integrated amp to separates...this was the biggest difference in sound that I've ever heard. Just my opinion.

A good preamp can make a huge difference in the sound. Since you are buying from a dealer, I would audition the preamp and see if you hear a significant upgrade in your enjoyment of music. Don’t think about bang for the buck as much as what is going on musically and how you respond to it emotionally. I’m not saying the preamp is more important than the speakers, but I am saying that I think the preamp is overlooked by many audiophiles who maybe never really heard the differences a good preamp can bring.

I might start by taking my preamp and amp to this dealer and compare my preamp to the preamp I am considering as an upgrade using the speakers I am considering as an upgrade.

Great Info and thanks for the responses so far,
To address a couple of your comments..
I couldn't agree MORE about upgrading both (way way down the road I likley will. but funds are a bit short for both speaker and preamp at same time.

Ricred1: Sim 350 p and 2 400m monoblocks are already seperates:)
all interconnects are fairly high-end as well.

since finding out the purdy new Focal are just sort of 14K that is not even remotely an option (looks like they will be my next used speaker buy)

I think i will have to sit around and wait for a used 740P to come up.

Mesch: I will be demoing the preamp soon! where I can compare with MY speakers/ and the rest in my house.

While there is merit to the "weakest link" argument in general, I do think that where speakers are part of the discussion that argument is less likely to apply, as long as your amp is able to adequately power your speakers. 

In my experience, speakers are almost always your best bang-for-the-buck upgrade and changing speakers will impact your sound more than any other component, where the change will be less significant or to as great a degree. 

Tho certainly audition to see for yourself if at all possible. 

Turn the whole thing off and walk away as it's all nothing but trouble. 

I can't comment on the difference for the speaker upgrade, but I can comment on adding a 740P to my system.   I used both  a Pass XP10 and Hegel P20 with my Pass X250.8 amp before getting a 740P preamp and the enjoyment of my system jumped up significantly.   More so than I would have imagined considering the other two preamps are great for their MSRPs.   If you factor in the MSRP of the 740P and the fact that my DAC and many others sound great direct, the $$ spent for the preamp (basically just a volume control in my case) may not be the best value.   But in relative terms to upgrades I've had in my system with respect to electronics and pricey cables, the 740P certainly was worth the price.    The depth and space around the instruments and vocals with the 740P in the system is pretty impressive and I know I would greatly miss it.

I will concur w/ ddafoe-

the pre-amp is the "heart" of any system and one should not skimp/cheap-out on this piece of gear.

It is interesting to read about mating a Simaudio product w/
Pass Labs.

Preamp. Sell the cables and buy the speakers on the credit card.

Wolf: that would definatly be THE most COST EFFECTIVE answer..:)

My Dac is capable of acting as a "preamp" w/ vol and balance controls. But my Sim has a definiant sound improvement.

I also like that the 740 has a much finer DB volume control and the cool metal remote, could be used as a weapon if necissary.

Hard to say which of the two will have more impact in your system, but I generally like to start with upgrading the speaker first, because I find it's generally easier to match an amp / preamp to your speaker, than the other way around.

And as others have mentioned, you typically get the most bang-for-buck with the speaker, so might as well pick your ideal speaker, and build the rest of the system around that.

To me it's always the loudspeakers which have the very most impact on what you're hearing, but there are limits as to how much  better you can get.  And with loudspeakers there's always the issue with how compatible they are with your room, where they can sit in the room, what kind of amp you're running and what your budget is.   All of this factors in.

Preamps aren't concerned with room size, what power amp you're running (for the most part), etc.

You mention having a $5000 budget.  In that case, I heartily recommend you seriously consider the Linkwitz LX521 system.  Most do them as a DIY project, which is where you get the very best price, but there are guys out there who will sell you a fully built, plug 'n play setup, at considerably more money than your $5000.  But within your budget, you can build an LX521 set, WITH AMPLIFICATION, and have $1000 left over.  The LX521 is not surpassed by anything at any price.  Build a pair of these things and you'll never buy another loudspeaker, ever.

The other option is that for about $3000, when you can find them and they do pop up here there, is a used set of Linkwitz Orions, which are the LX521 predecessor.  That's what I run and I have yet to have a visitor come to hear them and not leave without envy.  And when you buy 'em used, they're already built...

Always speakers first, always...

Throw away everything, and buy all new.

some more great points you all make!

I already have the components and "sound signature" I like.

New plans due to professional room/ acoustics analysis:
Due to my listening area having "not even the basics for great imaging" poor layout of walls and ceilings, small size, unable to move system to another location.

All I can really do is change how I aim the speakers, and move the acoustic panels around. I would not benefit by spending allot more on the stereo itself w/o addressing the other problems first.

Stringreen:I already have "overkill in components for what I have to work with"
I will not be selling my equipment as I do not want to loose anymore money in trade or whAtever other direction I go.

Preamp.
Speakers will be more of the same thing.

I’m using a Simaudio 740i Integrated amplifier with a new pair of Sopra 2 speakers. Previously I had a pair of Focal 1028be2 speakers also using the 740i.
The Simaudio electronics has a very musical smooth sound that matches quite well with Focal Speakers. I’ve heard both models of the Focal speakers using Macintosh, Spectral, Hegal and Naim electronics in addition to my own personal Simaudio 740i amplifier. I think the Macintosh and Simaudio gear is the best match with the Focal sound.
The Macintosh (solid state) seemed a bit more "colored", especially in the bass....the Simaudio was a bit more neutral but both were very musical sounding on the Focal’s.  I could live with either amp but given the choice I'd go with Simaudio.  Haven't heard tubes with either model of the Focal I have owned, but I'd sure like to try some Audio Research Reference gear with the Sopra's.  

I can't address your speakers, but I recently upgraded from a 340i to a 740P + 760A (one), and the difference in noise floor was dramatic, and strangely enough, the external phono stage has much less incoming noise on the 740P vs. the 340i (using the same input type on both).   If anything, the 740P makes the 340i seem like a much worse choice at its price given how much better the 740P sounds in my system.