Active studio monitors or Hi-fi speakers

Hello everyone.

I am a musician by trade and figured it is time to set-up a proper entertainment center for listening to music. I unfortunately do not have know much about this and decided to post here and see if you can help.

First of all what I am running on is just plan videologic digitheater 5.1 speaker set. I know it sucks but the only think I could afford. My rooms 12X17 and 10' high.

Here's my main delima. My friend suggested that I should buy active studio monitors and just use my computer as a source using my audiophile usb from M-audio. He suggested using Genelecs or some dynaudio's as well as Mackies and hafler. Would this set-up really yeild good sound? What are the trade off of using Studio speakers vs Hi-fi speakers?

Now if I decided to get regular passive speakers what would I get. Would the only other thing I need is an amp or do I have to by a cd player as well. Right now am willing to spend 600-800 dollars, hopefully closer to 600 range. Is this a realistic budget to get good result? If not what is the price range I should be shooting for? If it is possible to do this, would it sound better than using studio monitor or do I get more bang for the bucks using the Active studio monitors?

Finally your suggestion of a set-up pluse budget would be more than appreciated. Thanks alot.

Buy a used pair of Vanersteen 2ce speakers first. $600. Budget used up-but you can do no wrong from here. as a studio vs. passive debate, you will never beat the features of these speakers for you. Second find a reciever at this site- the older, the better-with tubes, the best. This will not cost much more but is the way to go. A cd player is $ 60 dollars more. Do not do studio speakers.
At this time, the real bottleneck with using a computer for a home theater system is the software. Windows Media Center and Myth-TV are the two main contenders, with Apple's new Front Row coming on strong. Do some research into them, and if you like what

Once the software matures a little more, the active vs. passive debate should heat up. Until then, there's not much to beat the processing power of the dedicated DSP's in a standalone receiver.
Try out some KRK's if you can.The software part is not my forte,good luck,Bob
Trade offs:
HiFi: good looks, 'nice' sound, excessive profit margins (some)

Monitor: potentially ugly, accuracy, value for money

I'd go with Genelecs or Dynaudio monitors, maybe the ones with built in convertors (forego usb and connect directly to computer + you can
accurately adjust for room deficiencies) and expandable from stereo
to 5.1, 7.1 or anything else.