You may want to try upgrading the speakers first. I was amazed at how much more sound I got out of my cheapie Kenwood receiver (HTIB: Sams Club: $300.00) when I connected my Definitive BP-30 speakers to it instead of the small speakers that came with the package.
I almost didn't bother switching out to a new receiver because of how robust the sound in the room had become with just some better speakers.
If you are watching your pennies, then maybe trying out the best speakers you can afford now, then waiting and buying a really nice receiver down the road may suit you even better.