Ideas for budget audiophiles

Not to be sarcastic, but I'm happy with my Phillips headphones that I got at Rat Shack for $10 originally $20 I think. I just plug right into my IPhone , and it sounds pretty darn good in my book.
I wonder how much better spending $500 would make the sound.
I have never heard any real headphone system though.

Well, it's like a lot of things in audio. If you are satisfied, that's all that matters. On the other hand, the people on this forum believe that they can hear the difference between pieces of equipment. I count myself in that group. I have tried headphones from $10-$400 and I can tell the difference. I have heard speakers from $200-$20,000 and I can tell the difference. I am hoping, however, that there are suggestions in the $200-$500 range that sound pretty good. Ideas?

Thanks TGrisham for starting this. It is good to know that someone who has some pretty $$$$ systems can find audio pleasure in less expensive gear.

Well here is my contribution to this thread.

Please note when I put all this stuff together a bit of compromise, luck, used and new gear went into this. I'm happy with the music that was played in these systems but then I also haven't had high dollar systems to compare too.

Headphone set-up.

Hifimediy Sabre USB DAC ES9023 + Tenor TE7022, 96khz/24bit capable DAC. New $52 shipped from China.

Indeed G3 Class A Hybrid Headphone Amp with RCA Blackplate 6189/12AU7A NOS tube. $90 used

3.5mm male to male gold plated auxiliary cable new $3

BeyerDynamic DT-770 600 Ohm headphones used $155.

This to me is a very nice sounding headphone set-up that I utilize quite a bit at work. The Indeed headphone amp with the NOS tube really helps with the DT-770s tendency to be a bit lean sounding and bass shy. Initially I was skeptical about headphone systems but I heard the difference with my own ears and it wasn't confusing. I originally had Sony MDR-V6 headphone in this set-up but when I moved onto the BeyerDynamics I heard the difference in noise floor and quality of sound. I also spent double the amount of the Sonys though.

Basement system.

This one was a 2 channel system that I had at one point. Really good sounding with Jazz, classical music and acoustic guitar. I really needed a sub though to make it sound really good with different genre's of music but I couldn't find a decent sub at the time in the under $200 price range.

Preamp: Emotiva USP-1 @ about $275 shipped used. Nicely reviewed quality amp with a good phono section, as well as a headphone section. Check out A'gon member Ferrari's review for more details.

CD/SACD player: Sony SCD-CE595 $72 shipped from Sony Style. This was a refurbished unit.

A'gon member Buconero117 recommends this CD/SACD player and I got lucky and picked one up from Sony. It is a nice player especially at sub $100.

Speakers: Tannoy Mercury M1 speakers $150 shipped.
I lucked out and scored these from a popular auction site. Wonderful sounding mids and highs. Depending on the amp you have you can get more bass from these speakers.

Amplifier: Hafler DH-220 in really good condition $200 I got lucky here that this one was babied and didn't need work done.

ICs: Monster Flat Screen Analog ICs found at TJ Maxx of all places.$8/pair.

Speaker stands: Pangea Audio LS02 $60 new. Note with a little crazy glue applied to the where the poles meet the bottom base plate you can fill these speaker stands with sand. It was a pain in the butt though to fill them but it was worth the effort. These stands weren't made to be filled with anything.

Speaker cables: 14 AWG Husky extension cord from Home Depot. $12

Power filtration: A heavy duty Belkin unit that I found in Big Lots. $40.

Power cords: Stock cords

Well this is what I had and it sounded good with most music. Obviously bass was lacking due to the limitations of the Tannoys and no sub.

+1 on the Hifimediy Sabre USB DAC. It's a great-sounding DAC, price be damned.