Yes, a $500-$800 CD player will make a noticable improvement in your setup. Music Hall makes a CD player in that price range that is supposed to be quite good. Also a small company called !ah makes a cd player which is a modified Marantz with a tubed output stage. You can read reviews of this player in the archives at enjoythemusic.com.
I just bought a new DAC that I have paired with an el-cheapo 5 disc changer. It improved the sound greatly. Bass got so much tighter, with the bass actually sounding like notes, instead of a jumbled mess. Also brass has so much more presence than it used to. I love this little DAC. I can also upgrade the power supply later. I also plan on getting a better transport at some point. I like the flexability of being able to upgrade transport and DAC seperately.
Good luck
