$700 max? For a few hundred more your scratching the realm of some seriously good speakers, if you were willing to start with two channel and add to it over time. May help with the WAF too.
If that approach is a possiblility, check out
Salk SongBirds or
Philharmonic 1s for a taste of what I'm suggesting. I would even be willing to gamble on AJ's
Soundfield Monitor 1s in that price range (I think he's asking $1300), and they reportedly kick some butt.
It's a longer term approach to putting your system together, but the results will be better, and probably less expensive in the long run (by avoiding upgraditis...just save some ducats and go first class from the get-go). If improvements/upgrades are what you're after, focus on the speakers (and room).