What you have is entry level gear.. but don't worry. Entry level gear makes acceptable recordings. So now you're looking for a pre-amp and a microphone. A mic and a pre-amp is indeed all you still need to make recordings. For a microphone, a good beginner mic is the SM57. A good begginner condenser is the Studio Projects B1. These both come in at about $125CDN at my local store, which suggests to me they can be had for about $80US.
Finally you need a pre-amp. You are not going to get a great pre-amp in your price range, but you can get a clear sounding pre-amp that will certainly meet your expectations of hi-fi.
Try picking up an ART Tube MP preamp. It is a one channel pre-amp that sounds decent, and will cost about $70US.
There are a few final things you need to get good sound. You will need a mic-stand to avoid microphone handling noise, and you will need a windscreen or "pop-stopper" to reduce popping of the mic, and get rid of nasty "s" sounds.
If you can tell me exactly what you are planning to record, I can suggest parts better catered to your particular purpose.
Most of the guys here are *really* into high quality recording, and one of the first things you notice, once you've got basic recording skills, is that as good as you thought your recordings sounded with $400 worth of gear, they don't compare to commercial recordings you buy at the record store. Studios capable of that type of recording usually have a quarter million dollars worth of gear, or more.
Excellent recordings are usually made with mics in the $400-$4000 range, pre-amp's in the $1000 to $3000 range, tape decks that chime in at about $25000, and a whole host of other ingredients including compressors, limiters, enhancers, and so-on.
If you're just planning on doing spoken word, then all you really need is a quiet room, and a few hundred dollars worth of gear.
Oh.. there is one more ingredient that top-quality recordings have.. an experienced recording engineer. Once you get the basics, you can start working on that experience.