How much of the front end depends on the preamp

I would absolutely agree with Elizabeth - your Yamaha, while a competent piece - cannot hold a candle to seperates, especially a seperate dedicated phono preamp. And the preamp, as I have also found out, is indeed the cornerstone of the system. You've got an excellent table and cart for now, and Vandy's are flat out great speakers.
My suggestion? Start with a seperate phono pre, like a Channel Islands VPP-1, which I think is $300 new. It even has an upgrade path - you can get the upgraded power supply later for around 150 clams. This is a great piece, with excellent detail, soundstage and low noise. You can try it into your Yamaha for now, and see if you like the sound. (CI has a 30 day return policy too)
BUT - if you combine that phono pre with a good solid preamp and amp combo, or a good integrated amp, your results wil be startling. Don't know your upgrade budget, but on the low-cost end maybe something used like a Creek 4330R integrated amp, or models by Nad (C 352 is a nice piece), or Rotel, or my all time old favorite Acurus DIA-100 or 150, (sadly no longer made) or any of the nice Musical Fidelity or Arcam stuff, you'll see what your system can really sound like, and the leap in musicality and satisfaction will be HUGE.
Either way, good luck and great listening!
James

After 14 years of this hobby, I personally had the hardest time getting the pre amp right. And I owned some pretty highly regarded pre amps. All had a very different sound, each pre always caused larger changes than any component or speaker change that I made. So to me that tells me, it is the most critical part of the chain, or at least from a design perspective the most difficult to get right.

To the best of my knowledge, the "primacy" question was first launched in this country by Consumers Union, who opined back in the 1960s that the two transducers in a system (cartridge and speakers), being inherently most error-prone, made the biggest differences in the sound; therefore, the largest portion of your audio budget should be spent on them. (Of course, these are the same people who won't admit that either amplifiers or CD players sound different, so no wonder!) The approximate recommendations I remember were 50% on speakers, 20% on cartridge, and 30% on everything else.

Then along came Ivor Tiefenbrun in the mid-'70s to announce that the 'umble turntable—hitherto almost completely overlooked as a candidate for primacy—had to be considered first. After all, it doesn't take a genius to figure out that anything lost at the very front end can never be retrieved by the loudspeakers, nor that distortions created by the phono front end will be only amplified faithfully thereafter…

So says Larry Archibald in the 5/98 Stereophile