I have a JVC GRDV500 (1, 1/4"ccd) and a Panasonic GS400 (3, 1/4"ccd's) and can easily tell a HUGE difference in quality between the two.

I have my tax return coming and I'm debating on whether to get another GS400, or go to the DVX100 (at over twice the price). My question is this: Is the difference as stark as the price suggests, or will it only be a minor difference and I might be better off getting an extra GS400 and using the rest to upgrade the audio end of things?

The GS is a consumer 3-chip, the DVX is a professional 3-chip. Download the DVX brochure and operator's manual to get a good overview of the feature set and that will tell you what the difference is. Also it depends on the work you're doing... assuming you're running a business with your camcorder, is a client going to take you seriously when you show up with the little GS. You know how good it is, but do they? If you're not in business and not planning to make money with your camera, then it may not matter as much. And you have other alternatives in between, such as the Panasonic DVC30.