I guess I'm wondering what I should upgrade next...
Well, do you like currently streaming via the Airport Express, as in it works and it's reliable?
If so, at the moment you're holding yourself back by going analog out of the Express into a very old AVR that doesn't have an optical input. No sense auditioning speakers when a system can only rise as far as its weakest link, and in your case that means analog out of the Express into that very old AVR.
Contained within your text are a lot of potential audiophool footholds, I'd suggest you resist grabbing a hold of any of them until you've made the simplest and least expensive upgrade: pick up a better used AVR on Craigslist that is slightly newer than the one you currently have, it could be a Yamaha, it could be any known brand like Pioneer, Harmon Kardon, Denon, whatever, but one that simply has digital audio inputs, specifically optical inputs. There are a glut of these to be had very inexpensively on the used market because now everyone wants AVRs with multiple HDMI inputs and support for high def audio in order to connect all their video sources to the AVR and then run one cable to their HDTV. So folks have been selling off their still perfectly excellent AVRs with excellent built-in DACs for years now. Look on Craigslist, there should be plenty of 5-7 year old AVRs available. Swap one of those in place of your Yamaha, then run an optical cable from your Express to it.
Live with that for a while, rely on the DAC within the AVR being fed optical from the Express and then decide if you want to go down any audiophile rabbit-holes.
(If you are impatient, or don't feel like going with a used AVR, buy something new with no worries, the DACs inside AVRs became commodity parts a long time ago. I was in Costco just yesterday and they had the Pioneer VSX-921 for $199. That's a superb AVR for someone on a budget that has HDMI and support for Dolby True-HD and DTS-HD...not that you care about any of that at the moment...but it would easily meet your 2 channel listening needs in order to test streaming via the optical out of the Express. That would be much better money spent at this point in your progression than ANY money spent on an external DAC, let alone $375, and it's more future-proof since you may eventually evolve into other areas of home theater and come to value a smart hub to handle all your audio needs rather than 2 channel music.)
I am particularly interested in hearing from the 'audio skeptic' crowd that don't buy into the expensive cabling and endless amp upgrade plans. For those of you who are certain that any amp with reasonably low THD is sufficient, do you agree that a two-channel amp is better than a 5.1 for stereo listening? What about DACs - would we notice a real improvement by going external DAC, vs AE internal DAC?
Unless your questions have something specifically related to Macs or OS X, all this is discussed and debated in other AVS forums, which thankfully are largely populated by audio skeptics rather than Luddites or audiophools.