How do you determine how much to spend on speakers

I'd lean more toward the speakers. My own view is that the quality differential on electronics has shrunk substantially in the last two decades. By choosing carefully, you can cut your budget in half on source and amps and not lose much. You can't say the same about speakers. (Or analog gear, if that's your game.) Also, you shouldn't choose an amp until you've chosen your speakers, because you want to be sure you're buying enough power. And wires are something to play with after you've assembled your system, not while.

Krazeeyk: The law of diminishing returns kicks in VERY early: A $200 CD player is not twice as good as a $100 CD player, and it gets even worse from that point up. That doesn't mean that a $2000 CD player isn't "worth it." Worth is an individual judgment, and if it floats your boat, that's all that matters.

Speakers are an obvious exception. Amps are too, to the extent that more $ buys more power (real power, not spec power). Ditto analog, but you don't care about that.

I suggested above that you pick your speakers first, but here's an alternative approach: Get yourself a basic set of electronics: a 100-200 watt integrated amp, and a respectable CD player (a Rotel 971 or the Arcam equivalent would be the bottom end), then take a long time on speakers, and don't actually commit to anything until you've heard them at home. Once you have the speakers, go back and reconsider your electronics. You'll lose a few hundred bucks on the deal if you decide to trade your electronics for something better, but you'll wind up with a great system--for you. (And note that I haven't mentioned cables.)

S2K: I know of a couple of hardcore objectivist types who claim to have heard differences among CD players in blind tests. However, they would say that the differences are subtle indeed, when they are there at all. There certainly isn't the variation in digital that there was on the analog side (leaving aside companies that intentionally voice their products, for whatever reason).