Active studio monitors or Hi-fi speakers

Hello everyone.

I am a musician by trade and figured it is time to set-up a proper entertainment center for listening to music. I unfortunately do not have know much about this and decided to post here and see if you can help.

First of all what I am running on is just plan videologic digitheater 5.1 speaker set. I know it sucks but the only think I could afford. My rooms 12X17 and 10' high.

Here's my main delima. My friend suggested that I should buy active studio monitors and just use my computer as a source using my audiophile usb from M-audio. He suggested using Genelecs or some dynaudio's as well as Mackies and hafler. Would this set-up really yeild good sound? What are the trade off of using Studio speakers vs Hi-fi speakers?

Now if I decided to get regular passive speakers what would I get. Would the only other thing I need is an amp or do I have to by a cd player as well. Right now am willing to spend 600-800 dollars, hopefully closer to 600 range. Is this a realistic budget to get good result? If not what is the price range I should be shooting for? If it is possible to do this, would it sound better than using studio monitor or do I get more bang for the bucks using the Active studio monitors?

Finally your suggestion of a set-up pluse budget would be more than appreciated. Thanks alot.

John