I just purchased two 1998 srx 700's and was wondering what is the best rear suspension mods that I can do to improve trail handling?

The proaction's in the SRX's are very limited, non-compliant skids. They were made for lake racing, not trail riding. W-arms are weak, and tend to break, should be reinforced if you have the skid out. Easiest way to upgrade is install the Viper updated shocks into your skid. You can let your existing limiter straps out enough for the added travel, or get new ones. Or you can easily swap in a viper skid, it a straight bolt in. There are always some for sale on TY forums. Or if more adventurous you can put a Cat or Pol skid in if you are handy, not that bad. Myself I opted for an Expert-X suspension and BLT front end.
http://i5.photobucket.com/albums/y168/zr9er/SRX%20Project/DSC01481.jpg