I would look at option one first. Upgrade your processing, bass management, and amplifier. This will improve the performance of the current speaker setup you have now. The Polks you are using seem to be mid-size or small, with the exception of the fronts which are more or less a large bookshelf in a floor standing cabinet. Your current setup of course would benefit greatly by using a seprate amp to drive it. Once you have the processing and amplification you want it will be easier to upgrade the speakers if you choose too.