I'd put the money into a headphone or amp upgrade. As far as I've read, digital source upgrades will improve the sound most noticeably in the area of soundstage or bass impact, which are not really the strongest points of the RS-1. Even if you do notice them, the improvements will be much more subtle than changing your headphones to something with difference sound signature. This is true for amps too, to a little lesser degree because you already have a decent amp. Maybe you could consider going DIY and making an upgraded SOHA. Maybe consider getting an entry level vinyl setup like a Technics SL-1200, because this will give you a very difference presentation of the music. The point of diminishing returns for the price with source upgrades is much faster than headphones or amps.
When people say source is important, it's more a matter of principle rather than practicality. People want to be as sure as possible that they are getting the most of the material before they spend lots of money amplifying a distorted signal. However, the reality is the almost ALL the sources that people on this site will use or recommend are accurate enough to make an extremely enjoyable system.
So, my advice is to use the money where it will make more of a difference in sound quality. At the very least you should not buy a new CD player without testing it out yourself and making sure it will make SOME difference in your system.
