best preamp under 500 for cheap, poor student

Subdoofus: are you looking for a video/audio pre? If so, you'll need one that supports multichannel (pass through feature) -- for surround.
But what exactly is wrong, to your ears or eyes, w/ your system that a pre would solve? Assuming it's the sound then, as suggested above, going w/ an active pre may cost well above $500 for better dynamics AND transparency (i.e. check out passive). Another route would be to check out another, better sounding, source player that offers variable volume output.

Lastly, regarding a 2channel pre with HT processor, also check out the relevant thread here at A'gon!

Good luck!

Try FT Audio's LW-1 Passive Controller ($500), they have a 30-day return/trial period. The unit delivers transparency, dynamics, imaging, soundstage, and amazingly deep & full bass. It doesn't have any of the sonic flaws commonly associated with passive pre's. And it also has 5 inputs, although no remote, but your a student so your room can't be that big.

Many people have replaced their high-end active tube and SS preamps with this unit. And it matches well with a large range of amplifiers. Contact Paul Lamm, the US/Worldwide distributor for FT Audio, and he'll honestly let you know if it will work well in your system. I called and he was honest enough to tell me that it wasn't an optimal match with my old amplifier.

http://www.ftaudio.com/

GoodSound Review
http://www.goodsound.com/original/other.html

UHF Magazine
http://www.uhfmag.com/Issue54/Passive54.html

Audio Ideas
http://www.audio-ideas.com/cgi/ads_1.cgi?iframe

i know audiogoners have conflicting opinions on ELAD but i heard it's transparent, uncolored and is very nice....the only problem is will it match well with my ss electrocompaniet aw100?
because component matching is equally important

One of the best used buys in solid state preamps is the Adcom GFP-565. It got great reviews in the audio mags in the early 90's, and had one of the best phono preamp stages around. You can sometimes find this preamp on the used market for around $300.

Also a good buy in used preamp is the B&K Pro10MC Sonata. It goes for $300 or less on the net. It is a MOSFET design for tubelike sound and has a good phono section that is internal switch for MC or MM.

I bought mine new in 1992 and am still using it.