I bought roughly $800 of acoustic panels from ATS acoustics for my little 1450c.f. room. Made a HUGE difference, as my room was mostly reflective, and since it was so small the speakers were closer to the walls.
What I liked about ATS was how thick the panels were, I got the 24x24" 4 inch ones.
However, I bought a miniDSP nanoAVR DL, and that made just as much of difference to me. Plus, it was great being able to customize the response.
I now am in a much larger room, with my same panels and an XMC-1. Honestly, I'd say they're both necessary.. It's funny, I have the Ascend Sierra Towers with RAAL, XMC-1, XPR-5, but I don't think they sound all that great unless Dirac. (Unless you sit right in front of them) The room seriously impacts the speakers. Not only that, it's so finnicky. Just about anything changes the response, so having something that dials it in at your MLP, is priceless IMO.
That reminds me, I need to save for more acoustic treatments..