Are Bang and Olufsen turntables any good?

NO not really!!

If they are light in the bass, I remember their "state of the art" speakers were heavy in the bass....good combination.

Dpaulku, If the seller told you that the (diamond) tip of the MMC5 "oxidized away" in his closet, he was selling you a bill of goods. That's pure hogwash. The MMC5 is not as good as what you have now, the MMC2, but diamond is diamond. It's as stable in air as any material on this planet.

Years ago I heard a malicious rumor that B&O turntables actually damage the vinyl played on them irreparably.
Any truth to this? If so I'm in BIG trouble.

A great deal of vinyl was damaged in the 70s and 80s (when B&O was big), but it wasn't due to any particular turntable. It was caused caused by the fad (pushed by B&O and many others) to play with the lightest possible VTF (downforce). This was terrible advice, and millions of records were ruined by it.

It sounds so intuitive: playing with lighter VTF reduces friction and record wear, right? Wrong. Inadequate downforce allows the stylus to momentarily be thrown out of contact with the groovewalls, typically by more dynamic passages in the music. When the stylus slams back down onto the vinyl, well, you can guess what happens when a very sharp diamond chisel rattles around between two plastic walls. You may not hear this happening in a less resolving system, but when the LP is played back in a more resolving system the damage is obvious, and irreparable.

The solution is simple, do NOT try to play near the bottom of your cartridge's recommended VTF range. If anything, play near the top of it. This will assure constant stylus/groove contact and reduce the chances of damage to either.

BTW, this will also enhance bass response.

I'm afraid that if I spend top dollar on a proper grade preamp, that the short comings of the RX will simply be amplified.

Not true IME. Putting a very high end cartridge on a cheap TT or tonearm can have this effect, but having a very good phono stage only makes things better.

The difference is that a very revealing cartridge will respond to (reproduce) vibrations and noise in an inadequate arm or table, thus ADDING mud to the signal. OTOH, a phono stage simply amplifies and equalizes whatever signal is coming in. Better phono stages do this with less distortion, less noise and a lower sound floor than lesser phono stages.

Buy the best phono stage for your needs that you can afford. You won't regret it.

What may have oxidized is the suspension in the cartridge and/or the glue that held the stylus. Either one is possible, likely even, over a long period of time.

Lewm is right of course about the diamond stylus itself not oxidizing. Anyone who passed HS Chemistry should know that's impossible. Carbon in its pure crystalline form has no openings in its electron shell for an oxygen atom (or any atom) to bond with. Of course whoever said that may well have oxidized their brain. ;-)