Dynavector XV-1S ---is it overkill for my system?

Your question is impossible to answer, given its subjective nature, but I have grown to believe that, if you think your tonearm is a weak link, buy a better tonearm FIRST. It will make your 17D3 sound better, if it's well matched in terms of effective mass, AND you will have it on hand when later you wish to upgrade the cartridge. In other words, a "good" cartridge will sound better in a great tonearm. A "great" cartridge will be held back by a merely good tonearm. (This is not to cast any judgement on the Classic tonearm, about which I know nothing; I am drawing on your own apparent opinion that it may be a weak link.)

Rushton---thanks for your response, I wouldn't miss not having easy VTA adjustment, I don't miss it now and frankly I have no desire to adjust VTA for different LPs, that's way too anal retentive for me! By the way, I forgot to mention my musical preferences are 60's and 70's psych and progressive rock, soul and funk, jazz, afrobeat, latin, etc. I'm sure this would have an influence on my choice of cartridge.

Honestly, the 17D3 is overkill for your Heed Phono. The XV-1s is probably ok, because it is a very anaemic cartridge but when you want to go ahead, think about a better Phonostage.

Best bang for your buck is a tonearm or phono preamp upgrade.

Syntax---back off, I love my Heed Quasar!! ;) No, seriously, I think it's a great little phono pre, but I have been looking into upgrading that part of my system as well, now that you mention it. It's funny what you said about the 17D3/Heed combo---the reason I bought the Heed is because somebody recommended it to me as a great match for the 17D3! And I do think they've worked well together, I'm just looking for more of what I'm already getting (neutrality, detail, dynamics, presence, excitement, all that stuff), you know how it is.