Lyra or ZYX ?

Doug and Syntax, I like your suggestions and can see very reasonable logic behind. But, are we not taking extreme cases into this equation. $100 tonearm with $4k cartridge is good for illustration but am I in that situation ? My tonearm is an SME 3012 Series2 with ATA (analog tube audio) modification. It may not be a top notch tonearm but it is still well respected, isnt it ? I paid $1.5k for it, the latest variant of this is SME M2-12R costing $2k. However there are lot of articles on the vinyl forums where people feel the older model was better. I do not know which is better but I would like to safely believe that they must be close enough hence the comparison. Mine is further modified by ATA (please read about them).

So, are we saying that a decent $2k tonearm is not worthy of a $1.5k cartridge (Delos or Yatra) ?

Or, am I being suggested that I should sell this arm, use my cartridge budget to top up and buy a modern arm like SME 309 and continue using my Denon 103pro ? And that will give me a better sound ?

Very reasonable question, Pani. Having no familiarity with any SME arms except the VI and V, I defer to those who have.

Pani - the SME has double knife edge bearings, that is the arm just sits on a knife edge ( but with 2 lines of contact ). A low compliance cartridge or cartridge that puts a lot of energy into the arm can "rattle" the arm in the bearings which leads to a smearing of the sound. Furthermore the SME armtube is quite resonant and again resonant colourations mask detail. Finally the detachable headshell lacks rigidity, again smearing the sound.
Typically well designed gimbal bearings will have significantly less rattle if correctly designed, and are in general much more suitable for low compliance or cartridges that impart lots of energy into the arm.
The most rigid bearing, ironically, is in a fact a unipivot, the stylus drag pulling on the arm imparts a rigid coupling between the unipivot bearing point and cup. A correctly designed self centering unipivot bearing will maintain this rigidity even as the bearing wears whereas in a gimbal or captured bearing, wear will result in loose bearings and chatter.
I would expect the Graham unipivot for example to give a far more precise sound from the Denon than the SME. In general I have found unipivots to impart more fluidity to the sound compared to a gimbal bearing arms.
There are always exceptions but I would not run knife edge bearing type arms ever unless I was using a very compliant cartridge that does not put energy into the arm.

Pani - to answer your question, I have had the SME V and can tell you the 3012 is not even close. The 3012 has an old fashioned charm, read coloured, to the sound and lacks resolution. The SME V has a very organic sound, its a big sound. Some people complain that it is a bit fat and loose in the bass/midbass but in my experience this is turntable/cartridge dependent. My pick of the 9" SME's is the SME IVi sold by Sumiko as the SME IV now has the same bearings as the V but omits the damping and other stuff you dont need. The IVi is an American version that has been rewired with Magnan ultrathin ribbon that is very good. You might also want to check reviews of the SME 312S that Albert Porter regards quite highly.

Thank you guys. Thats a lot of useful information to chew upon. Could I ask what would be a good compliance number to be considered "high" ?