The infinity Primus 363 is on sale at Fry's (last I heard) for just over $100/ea. Add a center and you are just under $500, leaving room for a considerable sub upgrade.
For fun: try turning off your center channel speaker and setting your reciver to phantom mode (it might be automatic when you shut off the center). See what that does to the sound. It should either ruin it or improve it.
If it improves the sound, you can consider running two speakers up front instead of 3 and that opens up new options at the $1k budget point.