Tok20000, I get what you're saying...but still say the source is the foundation of a great system, and without one you may have a great-sounding system, but it will fall way short of a system where one, or more of the other components are compromised. Your scenario only goes to reinforce that in my mind. It shows how all of the downstream components are far more interdependent upon one and other to sound their best, whereas the great source will remain a constant, and relys only upon the material (CD's/LP's etc.) you play on it (as well as your two good ears and the room, room treatments, electricity, achohol consumption, ambient temperature, and the phase of the moon, for all those who insist on pointing out details beyond the original question). The great source will remain a great source no matter what downstream components you put with it, and you can tailor the sound specifically to your tastes by altering those downstream components, especially, and yes then I would indeed START with the speakers. A great speaker will not necessarily remain sounding like a great speaker, and is very dependent upon the upstream components you match it with. I agree, it makes little sense to spend your budget way out of balance and buy a great megabuck source, only to play it through Fisher Price components. Balance and synergy are key here, as I'm sure you'd agree! If I take your scenario, and throw it out of balance the other way, and spend megabucks on some fabulous horns, as you suggested, that sound great at the dealer, but like crap on your high-school summer-job system....Well, then you could just as likely spend time and money mismatching and misunderstanding the potential of those horns, and maybe even find out that horns don't necessarily match up with all of your musical tastes, or to your room treatment, etc. You are locked in and your only option is to sell the horns for something else. But spend the same megabucks on a Wadia, or an Audio Aero, (simply examples and not a standard) and you will likely keep that component no matter what you end up with downstream. Yep, digital technology does change rapidly, but, at that level of performance, there is little out there that I'd imagine you wouldn't be happy with in 5-10 years time. Unless you are one of the hopelessly obsessed, in which case you will never be satisfied anyway, so enjoy what you've got if you can! With the best digital approaching, if not equaling analogue at this point (OK, that's a whole other thread which does not bear repeating) where else can you go in two channel? The most higlhly rated and raved about AudioNote DAC, which some hold to be a reference standard, is simply playing Redbook CD's and is outperforming all those oversampling "developments" that have been dominating the current market. Of course one could argue that the AudioNote is a "development" itself! Coincidently, per the Tok20000 example, I do happen to own and enjoy a similar system as you describe: Quicksilver 300B SET mono amps putting out 8wpc driving Klipsch LaScala horns. My source is certainly not state-of-the-art, but it sounds damn good, and when I did a direct comparison to much more expensive (and more contemporary) Wadia and Cary units, the differences were not siginificant, nor impressive enough to warrant the huge price difference (IMHO). I use a Muse Model 5 transport and Model 2+ DAC with a Muse proprietary L2S connection between them...decent units, but old news in todays market. Still they hold their own against current offerenings, and even with analogue I'd say. Now I could use that same Muse source/DAC in virtually any system and be assured that it was moving all the information I wanted it to to the downstream components. Synergy with a source is seldom a problem (though it can happen, I'm sure). If I didn't like the sound I would much more likely look at one or more of the downstream components than I would the source. But take those LaScala's and put them with a megabuck, megawatt SS amp and it may likely be a waste of some good horns and a good amp to no good ends (again, IMHO, and YMMV).
Perhaps what is breaking apart this thread into two predominent camps is that there are two questions being asked here. I'm not sure here, but perhaps more would agree on this scenario:
1. What is the most important part of a good two channel system?
Answer: The Source
2. Or what has the biggest impact on overall sound?
Answer: The speakers.
That is, if "overall sound" is to be taken to mean the way the kind of overall sound the system produces (for example Euphonic vs Analytical).
Does that all make any sense, or am I beating a dead horse at this point?! Giddyup!!!