Listen to the Psychic...
I can't tell you what to buy--you'll have to ask Miss Cleo for that! However, I can tell you what I did for ~$500:
Cambridge D300SE as transport ($224)
Absolute Power Cord ($40)
Ikea remnant board ($3.50)
Used Mappleshade Triple Point Cones ($65)
Ikea 2" thick cutting board ($19.99)
Sound Quest Isol Pads ($16.50)
Phoenix Gold digital cable, 2m ($50)
Soundstream/Krell DAC-1 w/outboard power supply ($175)
Phoenix Gold interconnects ($55).
Tiptoes, another Ikea remnant board as platform for the DAC
and four vibrapods underneath.
The sound is clear and detailed; hard to beat for the money. The Soundstream/Krell DAC-1 is on Dutch auction right now...
Not bad, eh?