It's true that Bachmann's standard line - such as your trainset - is pretty poor quality. But Bachmann unfairly gets a lot of flak for their trainset stuff when the truth is that their Spectrum line - at least the steam locos - beats the competition hands down both in price *and* quality, and these days also in the range of available models (compared to Bachmann, Kato's and Atlas's steam selection is pitiful). It's really tiring to hear people make disparaging comments about Bachmann based on what the company made 10-20 years ago, rather than their current products. I have both Kato, Life-Like, and Bachmann engines, and apart from the one standard run Bachmann loco, which isn't great, they all run equally well - if I'd had to pick, I'd say the Bachmann Consolidation is probably the best runner of them all. It's also by far the most detailed model. I bought it new for less than $60 from Trainworld (
www.trainworld.com) (whose prices certainly beat wig-wag trains), and if you shop around you'd be hard put to pay more than $80 for it. In fact, paying more than $100 for a good-running engine is a good hint that you either are buying very rare and unique locos, or that you're paying too much (big steam is probably the exception here). Both Life-like and Bachmann make a number of fine locos; the key is to make sure you don't buy their cheaper, trainset offerings. Even those have a place, though; they're great for trying out weathering and kitbashing techniques, and with enough work and skill they could well end up looking a lot better than a $150 loco that's too expensive to risk ruining by weathering and therefore will never look realistic no matter how detailed it is.
Though it won't improve the looks of your engine, getting a good MRC powerpack will make a world of a difference how it runs. Even a high quality engine runs poorly with a standard Bachmann power pack (I've tried so I know), but even a not-so-great trainset loco can be made to run well (if not silky smooth) with a good power pack. I was completely blown away by the difference having a good power pack makes. You can get a second-hand one on eBay for $20 easily. Though it's always a risk, I've never had a bad experience with second-hand locos bought on eBay, usually for much less than a new one and still good runners.
The bottom line is, though low prices usually mean low quality, above a certain price range you tend to get less and less value for your money (unless you're looking for a rare or special loco or roadname). Without the likes of Bachmann and Life-Like forcing Kato and Atlas to keep their prices less than astronomical, there wouldn't be a loco for less than $200 on the market, there'd be almost no N-scale steam, and the hobby would slowly die out as only wealthy retirees could afford it. The hobby would be a lot more pleasant if people would quit the tiresome, knee-jerk bashing of these firms. This forum is fortunately relatively free of "Bachmann bashers", but you need only check out the Atlas forum to see just how tedious it quickly gets. I can't think of a better way to turn newcomers away from the hobby.