It's clear that if you want better sound you must upgrade everything except your CD player. Very tough question to answer given the price point you mentioned. But, here it goes...
The good news is that there are so many great re-sale deals to be had. And, given your current equipment, you will notice a big difference in sound quality. There is some high end equipment -- with mileage on it -- that goes for a song. Much to your benefit.
My advice? Patience. Don't be in too much of a hurry to spend $500 to upgrade either your speakers or your receiver right now. I think you should get our and listen to as much mid-fi and budget hi-fi gear as you can and find out what you like. Then, develop a plan to get as close as possible to the sound you like. I really think your ears would be better served by taking your time rather than buying the best $500 upgrade you can find now, (whether it be speakers or whatever), without knowing where you plan on going with it.
I'm not suggesting that you need a ton of money, (it does help, though -- no doubt about that), but with another $1500-$2000 you can build a very satisfying system if you buy used gear wisely. And, believe me, what you buy on the cheap can sound fantastic compared to what you currently have. Hell, it can sound fantastic, period. But, you can also get tangled up if you don't pay attention to the synergy of the equipment you put together, especially if you listen to people teling you to "buy this" or "buy that" without having a sense of what it sounds like. How do you know if you like it? For instance, I have some swell Apogee hybrids that cost $2,500 that I could sell you for a few hundred dollars. A lot of speaker for the money. Whatcha gonna drive them with? Will you even like ribbons? Someone here mentioned Vandy 2 CE's. Popular speakers and some people love them -- I don't like what they do (actually I like what other speakers do that they aren't capable of). Synergy and matching equipment to your taste is the real key, and that is something that takes a little time to figure out. My advice is save your scratch for now. Best of luck.
The good news is that there are so many great re-sale deals to be had. And, given your current equipment, you will notice a big difference in sound quality. There is some high end equipment -- with mileage on it -- that goes for a song. Much to your benefit.
My advice? Patience. Don't be in too much of a hurry to spend $500 to upgrade either your speakers or your receiver right now. I think you should get our and listen to as much mid-fi and budget hi-fi gear as you can and find out what you like. Then, develop a plan to get as close as possible to the sound you like. I really think your ears would be better served by taking your time rather than buying the best $500 upgrade you can find now, (whether it be speakers or whatever), without knowing where you plan on going with it.
I'm not suggesting that you need a ton of money, (it does help, though -- no doubt about that), but with another $1500-$2000 you can build a very satisfying system if you buy used gear wisely. And, believe me, what you buy on the cheap can sound fantastic compared to what you currently have. Hell, it can sound fantastic, period. But, you can also get tangled up if you don't pay attention to the synergy of the equipment you put together, especially if you listen to people teling you to "buy this" or "buy that" without having a sense of what it sounds like. How do you know if you like it? For instance, I have some swell Apogee hybrids that cost $2,500 that I could sell you for a few hundred dollars. A lot of speaker for the money. Whatcha gonna drive them with? Will you even like ribbons? Someone here mentioned Vandy 2 CE's. Popular speakers and some people love them -- I don't like what they do (actually I like what other speakers do that they aren't capable of). Synergy and matching equipment to your taste is the real key, and that is something that takes a little time to figure out. My advice is save your scratch for now. Best of luck.