What makes a bigger change, dac or preamp?

IMO, pre-amp, no question. Three reasons.
1. I have found that they have a profound effect on overall system character.
2. Using the digital volume control on the squeeze products will adversely affect the sound once you attenuate more than about 3 dB or so.
3. By all accounts, the DAC in the Touch, while not SOTA is much higher up the food chain than the volume attenuation (see #2).

I don't know what the Warpspeed sells for, but it appears to be a variant/clone of the Lightspeed Attenuator which you can buy direct from the designer for a pretty modest sum, as high end products go. I've used one and its quite transparent. However, be aware that there are some compatibility issues w either product because they are passive rather than active pre-amps. If you go the the Audiogn Lightspeed thread, you can "read all about it", as along as you've got a day or two to spare ;-)

In your particular situation I second Buconero17 and Swampwalker. I would pay particular attention to Swampwalker's argument as it applies to your setup. Also, with the active Quads where you need longer Interconnects, consider preamps/pre-amp DAC combos that have balanced (XLR) outputs. If you are on a budget, you might want to check this out: http://www.pacificvalve.us/MatrixBalanced.html
Good luck

What makes a better upgrade path?

A better Preamp.

The best upgrade for any system is upgrading the weakest link.

As has been said, the DAC in the Touch is acceptable. It's digital volume control is not. To control volume, it more or less removes bits. It's digital output is bit perfect at full volume output, but not at any other volume level. Don't hold to me that exactly, as I'm not the white paper/tech type, but it's what I understand of it.

Also, get a preamp with XLRs if all other things are equal. XLR cables do far better with long distances and other things than RCAs.

What's your budget? Is the Squeezebox your only source or do you need analogue inputs as well?

If your budget is ample enough, you can go with something like the Peachtree Grand Pre, which is a preamp with a high quality dac built in for around $4000 (I think).

Or, if your budget is smaller, you can get a dac with volume control that will work as a preamp for only a digital source. The Emotiva XDA-1 fits this bill, costs around $370.

The third option is a separate preamp and dac. In this scenario I would buy a dac without volume controls, a basic, well regarded example of which is the Musical Fidelity V-dac at around $350. You could combine this with an affordable preamp, like the Emotiva USP-1 at around $500, and be set for multiple sources including digital and vinyl. Emotiva is just the first such preamp that came to mind, but there are other brands in this price-range.

If your goals are modest, I recommend the last example.

Good luck, have fun.

--A.R.