[Brooko]

Different POV - or at least a different track to go by.
 
You have a decent source for the cans you have (the Xonar).  First step should be getting rid of your 128 kbps rips, and as it's from a computer - rerip your CDs to FLAC.  Space shouldn't be an issue - and if you need to load a portable later, just transcode to lossy format of choice (eg I use 256aac for my iPod Touch).
 
Now - your current cans don't need amping.  I understand what Cifani is saying about the Valhalla - but it's overkill for those cans.  The tubes add another dimension - but you don't need them at this stage.  Different if you had something actually requiring extra juice.  For now - if you really want to see what the benefit of amping is, go simple - with something like a Fiio E9 - very powerful, tinge of warmth, value for money.
 
If you do really like the MS1is (you'll note I have them in my sig as well), chances are that you'll also try your hand at moddiing eventually.  This can suck up some $$$.  I've done the basic mods, but then also bought bowls, new cups (aluminium), alternate pads, and now have a set of jumbos on the way.  I'll also be ordering wood base and cups sometimein the next month or so - so that will suck up more $$$.  It's amazing what you can turn the Grado/Alessandro line into (bit by bit).
 
If you're like me - searching for your sig (brand of cans), you're likely to try more headphones over the next couple of years.  Use your available cash for that first - the Xonar + the E9 should drive most cans you want to try in the meantime.  Once you've found your signature - then look at the best amp/dac combination for the headphones you settle on.
 
I'd love to go to the Bifrost + Valhalla now - and I possibly will eventually.  But I have a 'good enough' dac&amp at the moment, so I'm narrowing down the headphone brands *(house signatures) so see what I like.  Buy and sell until you find your brand - then upscale cans / dac / amp.  Then you're done.
 
It's an alternative anyway.  The $300 you're consdering for the Valhalla now could go to an E9 + another set of cans.  Food for thought.

 

[Tilpo]

Also look into Little Dot, they offer some amazing amps for their price. The Little Dot MK III is famed for being an excellent budget tube amp, with good tube rolling options too.
But like Brooko said, get a decent amp first. Although I disagree with a FiiO. It might be better to shell out ~$300 once and be done for the coming years when it comes to amping.

 

[Brooko]

Ah - no that was Cifani.  I suggested experiment first and just get an entry level amp if he wants.  His current cans don't actually need it, and the money could be better spent trying different headphones until he finds the sonic signature (house sound - whatever you want to call it) he will eventually settle down with.  Then upgrade the amp and dac.
 
Oh - and have you heard the E9?  Check around the boards.  The E9 has quite a bit of respect for an entry level.  I know some of the other Fiios are considered 'toys' by a few here - but the E9 has some serious driving power.  You'd be surprised 

 

[Tilpo]

I haven't heard it, but I'm aware of it's popularity.
In fact I have even convinced about four people to buy one, and they never seemed disappointed.

All I'm saying is that if the OP is willing to shell out a few extra bucks it might not be a bad idea to get a better amp than the E9.

 

[IMAWolf]

I think with your current headphones an amp wouldn't really be necessary... okay its just me but if i were you i'll break out the soldering irons and get some nice wood cups for those MS-1s headed your way. ;D

 

[Dreshx]

This is great stuff guys.  Exactly the kind of feedback I was looking for.  I have been reading up on some of the mods available for the MS-1s and that route definitely has me intrigued (especially those wood cups).  Brooko - I'm pretty sure you're spot on.  I look forward to trying a host of other cans in the future just to see what other sounds are out there.  The hunt for my "sig" really seems to be a part of why this hobby is so appealing to me.