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

Great responses everybody, I really appreciate all the input! I'm leaning toward agreeing with those who feel that the XV-1S would indeed be overkill in my system. The best approach seems to be to upgrade in a smaller increment, and to do it more evenly throughout the system---for example, I could upgrade both the phono pre and the cartridge at the same time, with the same amount of money. Now I'm thinking about a Dynavector XX-2 MKII with a better phono preamp, but that's the start of a whole other thread---any phono preamp suggestions? Solid state or tube? Believe me, in the last few weeks I've been researching phono preamps like crazy, and very few seem ideal to me, when I factor in features (gain, loading), sonic characteristics, price, availability, you name it. For example, I love the idea of getting a tube phono pre, but I'm afraid of having a higher noise floor, and losing the low frequency extension and "slam" I need when I listen to Funk, for example.

Personally, I've succumb to Lloyd Walker's sonic philosophy that uses a solid state phono stage. This is mostly due to modern times with cartridges having smaller output voltages. SS is just a more stable amplifying device for very, very small signals. I still prefer tubes in my line stage and amplifier, but I have been very happy since moving to SS phono stages.
My favorite has been the Klyne 7PX5.0, but these may be out of your price range. If I were you, I'd keep my eye out for an older Klyne phono stage. They don't come up often, but it will be worth the wait, IMHO.

I have heard the heed phono in my system. It is a good budget phono stage.
You will not be getting anywhere near the performance potential of the XV-1s without a better phono stage.

Cheers

Okay, how does this sound---Dynavector XX-2 MKII with a JLTi phono pre---opinions?

While procewise a step down from your current phono stage, maybe you should audition. Dyna P75. You get synergy with Dyna carts, and the ability to run in PE mode, which works especially well with thelow impedance Dyna carts like the XX-2 or 20X2L.