What are your reasons for wanting to upgrade? Do you want the added features or are you just looking for a better sound? I don't think sonically you will notice much difference. If you just want better sound, get an amp and use the Onkyo you have as a preprocessor.
Unfortunately, I don't think that receiver has pre-outs to support an external amp.
Sdaz,
Considering the shipping weight on the R530 (according to Amazon anyway) is 15lbs it's hard to believe the stated 110 watts per channel is realistic.
The 705 would be a huge step up in features from that HTIB receiver. And most likely a healthy step up in sound as well.
In the end, however, the weak spot may be your speakers.
You may want to lower your budget on a receiver and set aside some money for new speakers down the line for the best overall results.