JL,
First, we've got to get you some room to work. That mug is a beauty, but it doesn't give much room to work the brush. I think part of the problem is the quality of water, which means you'll have to put more effort into creating your lather. Before you rush out and spend any money, grab a cereal bowl out of the kitchen and try using that for a day or two. You'll need to wet the bottom of the soap when you first put it in so that it will meld to the bottom. If you want something more attractive, here are a few options that you might look for:
http://www.shavemyface.com/gallery/a...rmal_Bowls.jpg
The blue bowl and latte mug came from Wal Mart, about $2 bucks each. The stainless steel bowl on the right is my go to bowl, about $1 at the thrift store. You could also choose to use ZipLoc snap and seal containers, 6 to the pack and for around $4 bucks a pack.
Now, for the brush. Up to $70 will get you a great brush. My personal preference is the Shavemac. I've got two and one inbound. Reasonable prices, great quality, and they look good. The link takes you to Shavemac's Handmade Finest Badger page. You can also elect to create a custom brush. Shavemac brushes have a "lightbulb" shape, and of all my brushes, I enjoy them the most. Soft on the face, but not so soft that they "splay" against your skin. Below is the custom ShaveMyFace Cocobolo Brush, which has a 26mm knot. The middle brush is an Edwin Jagger Travel brush sold by Crabtree & Evelyn. It's probably somewhat similar in size to your AOS brush, with approximately a 20mm knot. The brush ont he right has left my stable and moved on...the Savile Row 241, 30mm knot and this puppy is huge!
http://www.shavemyface.com/gallery/a..._Acq010506.JPG
Take it slow and easy, and keep asking questions!
RT