Audiophile newbie

I'm a mid-twenties yuppie. I love good sound, but I'm also not reckless with money. What are some basics I should know about when in comes to audio set-up (pre-amps, amps, speakers). I actually don't understand what purpose a pre-amp serves.

Here are a couple straight-up questions:
What does a pre-amp do?
What are the concerns to consider when choosing cables?
What are the best "bang-for-your-buck" brands? (ifi, Arcam, Vanatoo?)