An audiophile is someone who assembles a stereo system with care and then attempts to better it as a hobby.
Robr45 - That's pretty much it. Nothing more need be said. Relative to some of the conversation here I would add that the actual "improvements" are entirely relative to the individual. Absolutes are a carrot on the end of a stick.
Regarding comparisons to live music (which I also enjoy on a regular basis) - I cannot think of a single recording I have that I actually heard performed live in the venue in which it was recorded so I'm not sure how I'd compare it to the live version. Also, I understand that "aural memory" in human beings is not very good at all (I seem to recall reading that on more than one occasion). As far as what a system does to recreate the music, how it sounds or how it distorts the music; ultimately if I like the way it sounds in my room I don't give a tinker's cuss how close it comes to someone else's version of what it ought to sound like, or what distortions are at play. If I enjoy it and it engages me on an ongoing basis, well, that's what matters to me. What matters to someone else may be entirely different (which is why I don't believe in absolutes).
I think folks in these forums compare components to other components because that's what is available to us to bring the music into our homes. I don't know many folks who could afford to bring in live musicians to play at their whim whenever they feel in the mood. So weighing a Pass Labs against paying Lucinda Williams to come into your living room and perform seems pretty pointless. There's a guy who lives across the lake from me in Redmond, WA who probably could afford it, but I think he arguably puts his money to better uses. I'm told he has quite an array of entertainment systems though.
Well, even though "nothing more need be said," I've gone and said something more anyway.