Triathlon - How should I upgrade my bicycle?

I have a Giant OCR-3 2007 model. I just began riding last summer and love it! I have added aerobars and pedals because I use the bike for triathlons but am looking to upgrade my wheels. I am trying to spend less than $500 for both the wheelset and tires and any other upgrades. My friend is more experienced and told me I might have trouble because my bike is an 8 speed. Let me know what you think all thoughts and suggestions are appreciated!

Are you having problems with the stock wheelset, or are you looking for something lighter and/or more aerodynamic?

You might consider buying an aero helmet for your triathlons if you're looking for a touch more speed. Less costly than a new wheelset.

Unfortunately, with a budget of $500, your biggest bang for the buck expenditures aren't very exciting ones. Heres a list of things that can make a big difference:

Position - get fit by your LBS
Clothing - A tight fitting tri suit will save as much time as a 404 front wheel over a baggy jersey
Aero helmet - Find one that fits to your back. If the ones you try stick up in the air, get one with a shorter tail
Tires - Bontrager Race X Lite Pro is a fast tire and it costs $60 but if you just run them in races they should last a while and you'll be much faster for it
Tubes - Lates tubes cost $10 each and also significantly reduce rolling resistance
A clean system - by this I mean. Learn to get by on as little bottles, and gear strapped to your bike as possible. All that stuff hanging in the air, and weighing down your bike does not help. For short course racing I use one bottle that is placed horizontally between my forearms. No spare kit, nothing on the frame, and nothing behind my saddle.

Theres a good saying that goes, "speed is in the details" all the things I suggested above probably add up to about half of your budget. Save the other half for a bonafide tri bike.

I may be completely wrong as this is just going from stuff I've head, but to add to the list above possibly shoe covers. Very cheap and at that price and give a bit of benifit.

Wheelcover. I have no personal experience with these, but have heard that they are effective. At $60, it won't break the bank.
http://www.excelsports.com/new.asp?page=8&description=Wheel+Cover&vendorCode=CHAERO&major=1&minor=24

I believe there is another mfgr but I can't recall the name.

Good luck !!

I may be completely wrong as this is just going from stuff I've head, but to add to the list above possibly shoe covers. Very cheap and at that price and give a bit of benifit.

Cheap but they make transitions tricky. I had a friend who went to the wind tunnel and saw a benefit, but after trying some practice transitions it just wasn't realistic.

Wheelcover - It's not a bad idea, I've used one, it's all right. It's a $60 disc and in this case you get MORE than you pay for, but I still liked riding a solid disk better that I got of ebay for ~$200 with some patience.

I was in a similar situation when I acquired a used tri bike. The rims could not be trued and the bearings were shot. I purchased a set of Neuvations and I am a big fan of Tufo tires tubular/clincher design. I am very pleased with my Neuvations, super smooth bearings, still true after a year of training/racing. For my Tufo tubular/clincher tires I use Stans sealant and I have not flatted in over a year. This whole set up will get you well under $500, for what I feel is a great wheel set/tire combo. I don't know personally about the 8 speed cassette problem, I would imagine you would just add some cassette shims.

Pretty much any Shimano wheelset will take an 8/9/10 speed cassette. If it says 10 speed only, then you obviously can't use it, but if it says 9/10 speed, you can fit an 8 on there too. The bigger bang for the buck would be a wheelcover from wheelbuilder.com. I agree with Nymtnbkr. Neuvations are a good compromise. Generally a pretty solid wheel for a good price. And if anything goes wrong, the owner has been very quick to rectify the problem.

Also, the performance Forte Titans have been getting good reviews from people on this board for under $200.