Need Help Starting from Scratch

There is a great deal on the Pioneer website for a nice 2 channel receiver SX-A6-J for $280 instead of $500. The matching SACD players appear to not be available anymore. I have the SACD player and have been very impressed with the product. If I were in the market for a 2 channel receiver I'd strong consider this as an option. The main downside is that it doesn't have a subwoofer pre-out, it's intended for pure 2 channel listening.

I'm a big fan of Focal (very efficient) speakers and really enjoy listening to my father-in-laws 706v bookshelf speakers. I think they would be a great match for the Elite reciever. Paradigm (very efficient) and Monitor Audio also have some great products as many other companies that others will mention.

I think that a monitor/bookshelf speaker can sound great as long as your music choices are not bass heavy. If they are look for a floorstandig model or consider a subwoofer.

I know nothing about DACs beyond what their function is so I can't say anything about them one way or the other.

I'd recommend taking a day to visit a few local stores, if they exist, to listen to different speakers to see what you like. When I took my father-in-law shopping we visited three stores and listened to everything that was visually pleasing for the WAF and was in the budget.

there are, of course, lots of ways to go, all of which have their virtues. however, if i were starting from scratch within your budget, i'd look to acquire a few high quality "keeper" pieces,as opposed to merely serviceable starter-level stuff; you can always augment later. thus, i might start with von schweikert vr1 monitors (genuinely great and often listed here around $500 used) and an integrated w/dac such as peachtree decco or music hall mambo (around $500 used); i'll assume that initially you'll use your pc as your source, though you can easily add an inexpensive cd transport. a few more bucks for digital cables and speaker wire (e.g. blue jean, monoprice) and you'll have a very fine system.

Wow did Loomis hit it right on!
I'd be happy for a long time with that set-up. I think you'll end up spending a little more for the integrated though.
The only reason for a receiver is if you want radio-most good stations stream anyway.

OK - it looks like a computer is your preferred source. You'll definitely need a DAC. What type of digital out does your computer provide (coax SPDF, optical, USB, firewire)? You'll want to choose a DAC that makes optimal use of your computer out. The first two output formats are easier to get "right" than USB, but USB can be excellent when done right. To get good USB output, you want to choose an "asynchronous" DAC, which range in price from $350 (Music Streamer 2+) to thousands, or get an asynchronous USB/SPDF converter (e.g. Empirical Audio Offramp, likely outside of your budget). If your computer outputs either of the first two formats listed, you can choose from many standard non-USB DACs.

I think you should limit yourself to the following setup choices:

Computer -> DAC -> integrated amp -> speakers

Computer -> DAC -> powered speakers (with volume control)

Computer -> DAC/Preamp -> amp -> speakers

Computer -> DAC/Preamp -> powered speakers (V control not needed)

I personally wouldn't buy a receiver or integrated with an internal DAC, except for the Decco mentioned above, but that doesn't have a very good amplifier, so I wouldn't do that unless I wanted to add an external amp to that!

There are a few good DAC/Preamps out there. The Benchmark is one of them, but there are others. You want to choose one with a very good volume control.

I've heard good things about that Music Streamer 2+, and would be tempted to get that plus a conventional integrated and speakers, or the Benchmark plus a warm sounding amp and speakers (I think the Benchmark, especially in earlier version, could sound a bit analytical).