I have a Polk PSW10 right now. I am starting to updgrade my system into a 7.1, but the sub is lacking. Would a Dayton sub be a big step up? They are pretty cheap, and affordable. I was wondering if it is worth it. I don't have a huge budget right now.
You might want to wait until you do have more of a budget, because more money (up to a point) gets you better bass. If you save your money and buy a great subwoofer, this will probably save money in the long run, as you then should not feel the need to upgrade again later. I personally would not go with anything less than the bottom of the line from SVS:
http://www.svsound.com/products-sub-box-10nsd.cfm
But if you can ever manage it, it would be really good to get:
http://www.svsound.com/products-sub-cyl-pcultra_new.cfm
Of course, many people don't like waiting, and want instant gratification. Unless they are rich, they end up paying extra that way, as they keep upgrading over and over, which wastes money.
You are, of course, quite right that your Polk PSW-10 is rather lacking. But with an often very low street price, it may not have been a terrible value.