""How do we know which componet is colored? Or if the source is colored? It has been suggested to me that EQ negatively alters the tonal balance of a speaker."
Always a problem. I do three things:
- Use well-recorded reference disks for system evaluation and setup. That generally means naturally miked, purist recordings of acoustical music, made in a good hall. Multimiked commercial recordings will generally be bright or screechy by comparison, and don't image well.
- Use measurements. They don't tell you everything, but they do tell you which components are flat or not, since aside from the speakers, they should all be a straight line. But usually these days, unless you're using a high output impedance amp, it's the speakers that are the main culprits, followed by the cartridge. I'm not a big fan of using one colored component to compensate for another, though in that I'm probably in the minority these days. That's because I think there are cheaper and more effective ways to do the same thing, namely EQ.
- Just listen, because in the end, none of it really matters, it's what you hear with the recordings you listen to that counts.
BTW, I think those who are criticizing EQ are thinking of the old analog jobbies. They rarely put the correction quite where you needed it and they tended to introduce other colorations as well. DSP-based EQ is much more effective. However, unless you have a lot of time or are perhaps making a copy of a favorite recording, when it comes to correcting individual recordings I think most of us have to settle for a rather coarse adjustment of the sort that's best suited to really unlistenable recordings. So I'd begin with a few target curves -- maybe hot pop, large ensemble classical, small ensemble classical, all in series with your room and speaker correction, which should be constant. Then I'd use manual correction to make the really offensive recordings listenable.