Most important component??

Single driver speaker running full range with no x-over. Not as good as an optimized wave-guide speaker but considering the trade-offs, a good substitute. Greatly reduces the necessity of room treatments.
My system is in the living room so I can't make it into an anechoic chamber. So beamy single driver reduces room reflections in the H-F. Reflections in the L-F give the bass some body.
2nd would be Jaybo's suggestion of CD / LP quality. Sadly that is out of our control.

For me it's the room&speakers,more the room then anything.My room is OK(14.5'x22').But I know if it was bigger my speakers would really be able to do there thing.

Is the reason CD players, as opposed to Cd/redcordings, rank so low becasue there is relatively little variability in their quality and level of competence to do their job?

The source,always has been always will be.Doesn't matter what you do downstream it begins at the beginning.

The most important component for a CD based system would be a turntable.