Improving the rear shock is definitely money well spent although, to fully benefit, it should be coupled with a fork upgrade too as a better shock will highlight how bad the forks really are!
Have you had a look here, where I set out the changes I've made?
http://www.ukmonster.co.uk/monster/s...ad.php?t=56541
I think the main culprit with the rear is the standard progressive spring rather than the shock itself so, if you want a really cheap upgrade, you could try just changing the spring to an Öhlins tailored to your weight, which is a straight swap and is only about £80.
The recommended Öhlins shock is the DU737, (which is effectively the same as fitted to the 1100S but with a softer spring). They can be had for under £500 and offer rebound and preload adjustment.
If you want something fancier, then there's the Öhlins DU432, which has rebound, compression and preload adjustment plus a remote reservoir. It's actually only listed for the 795, (which was an Asia only model), but it is available via the internet and would still be under your £800 estimate.
To be honest, when I swapped from standard to the DU737, I noticed a marked improvement but the difference between the DU737 and DU432 was less obvious (but I do like the look of it!).
If you do go down the Öhlins route, make sure you also get a spring that's suited to your weight and riding style - the springs on both the DU737 and DU432 were too firm for me (115N/mm) and so I fitted softer ones (105N/mm). Some suppliers will allow you to order the shock with your preferred spring rather than buying it separately, so that can save some cash.
Chris.p fitted a Wilbers shock to his Evo and really rates it and Flip has good things to say about Nitron. I think, in both cases, you get more features for less money than with the Öhlins. I think Omar has just got a fancy Maxton for his Evo, but I don't think he's properly road tested it yet.