"I'd like more power for video editing and gaming but want to upgrade only when I can get significantly more power and speed, say 50 to 100%+ more than I have now. Is this possible now while staying in the $1,000 or less range or is the tech not there yet? What blows my system away?"

It all depends on the criteria used to evaluate performance.

At CPUBoss.com, the difference between the P8700 and the i7-4500U is 6.2 vs. 8.2, but at CPUBenchmark.net, it is 1664 vs. 3963.

$1000 is going to be a tough price point, but if you go to $1200, you can do it.  Hint:  Don't consider the 'U' processors ... they are designed to consume low levels of power to extend battery life - not what you are going to need/want for video editing. 

You will need to look at models other than the Inspiron for these processors, which leads you into performance/gaming systems and business models:

The Latitude E6540 starts at $1050 (plus a discount if purchased 'offline' through a sales rep) with a i5-4300M, which scores a 4451 at CPUBenchmark.net.  This model only includes Intel graphics (still outscores the old 9800 though), 4GB RAM and a 1366x768 display.  The E6540 only comes as pre-configured systems right now (initially, most systems are, then configuration options are added later in their life cycle), so the next step up (for full HD and 2GB DDR5 dedicated graphics with i7-4600M - 5116 score) is $1400 (minus 'offline' discount is probably around $1,100-1,200).

The E6530 is fully configurable and can be configured with the i7-3240QM (scores 8504 on CPUBenchmark.net, 8.4 vs. 6.2 on CPUBoss.com), 8GB and 1GB dedicated graphics for around $1,400 (minus discount would probably be around $1,200).

The Precision models are more expensive, but can be configured with a system capable of MUCH better performance than what you have ... but the price is going to start around $1,300 (minus discount).

So, $1000 will get you better system than you have now, but the difference may be marginal (biggest improvements will likely be in size/weight, graphics power, and battery life).  $1,200 will significantly improve all facets of your computing experience.

"how much faster are Dell desktops than Dell laptops"

Significantly!  Power consumption needs not be considered, so they are all about the computing power.  I just purchased an OptiPlex 7010 at work - i7-3770 (scores 9418), 1GB graphics, 128GB SSD, 1TB 7200 RPM HDD, 16GB RAM for $1,000.

"Should I upgrade the graphics card? I don't even see a way to do that on some of the systems."

This depends on the system ... not all accept discrete/dedicated graphics and simply use the [more-powerful-than-ever] on-chip Intel graphics.

"How are these new systems on heat compared to the 1520?"

I don't know compared to the Vostro, but cooling has become much more efficient (cooler and quieter).

"Touch screen or not?"

Completely up to you and how you will use it.  Touch is nice in many scenarios, but I find that unless the keyboard can fold back 180 degrees - basically converting to a tablet (like some XPS models) - that the keyboard and screen combine for an awkward touch experience.  It will add significantly to the cost ($200-400) ... significantly with the price point you are considering.  You can get touch screens in cheap, low-end laptops - around $400-600, but it is a premium add-on for high-end systems, not really considered essential, or at least AS important as RAM, graphics, CPU, etc.

"Windows 7 or 8? I've heard bad things about 8 but haven't used it."

Don't believe the bad things.  Windows 8 is a little different from 7, but it is still an improvement - in many ways - and it is completely a matter of preference.  If you get a system with Windows 8 Pro, then you will have the right to downgrade to Windows 7 - IF you wish to.

Thank you, very useful info! Now I think I've narrowed it down to Latitiude E6540 vs. Precision M4800 both with i7-4800MQ and 1920x1080 or 3200x1800 screen. M3800 looks good but I wonder what it gives up to be so thin and light and $ is high.

M3800 looks good but I wonder what it gives up to be so thin and light and $ is high

Cost is reflective of touchscreen and high-tech (discrete graphics, i7 processors, 16GB, SSD) and the fact that it is so "thin and light".  It obviously cannot be configured with an internal optical drive, and can only be configured with a single drive.