I need some advice on the next step in my Home Theater. Over the course of 2 years this is what have. It's a hodge podge, basically a 4.0 surround system (If there is such a thing) My livingroom is a 14x20 and all the AV equipment is on the short side of the room.

Samsung LNT4661F 46" LCD
Sony DVP-NS77H DVD w/upconversion
DirecTV HR21-700
Sennheiser RS130 Wireless headphones
Yamaha RX-V663 (Latest addition/upgrade)
Kenwood tower speakers (hand-me-downs) Fronts.
Alergro bookshelf (hand-me-downs) rear surrounds.

It sounds pretty good but I'm sure there is more to be heard and seen from this equipment. Ultimately I want to add the following items pushing toward a 7.1 with front and rear Subs:

Newer matched Speakers
Subwoofer (front and rear)
Blue Ray DVD player
Media Center PC
XBox360 or other gaming console

I'm guessing my next logical choice is the speakers. I'm looking to spend arround $1000. I was thinking about buying just a sub as a quick fix.

What would you all do in this situation? Money is slow in coming out of the general fund. My accountant (the ever so patient Mrs.) states "Isn't it loud enough already?"

My reply is always .... "What? I can't hear you..." followed by a "No..."

You listed your equipment, but that's only a small part of a home theater. In order to evaluate what should be done next to improve it, you'll have to provide more information.

What are the current dimensions? Seating? Accoustic treatments? Paint scheme? Layout? Riser? Stage? 7.1? Light control? Etc.?

Looking at your setup I would have to downgrade my asperations from "Home Theater" to entertainment system with surround sound.

The room is a rectangle. about 14x21, all the equipment is on one end (short side) and I have 2 recliners about 15' from the screen. The walls are wood with a ceramic tile floor. I currently only have 4 speakers that are hand-me-downs. 2 large Kenwood floor standing and 2 Alegro bookshelf speakers mounted on the opposit wall high in the corners.

If you're sitting 15' away, probably the first thing I'd do is upgrade the TV.

In order to get the full benefit of 1080p from a 46" set you need to be sitting 6' away. From 15', you need a set that's at least 70", just to get the full benefit of 720p, nevermind 1080p.

Without upgrading the TV size, I wouldn't even consider Blu Ray and I'd probably drop the D* package back down to SD.