Price/performance curve

Overall I think you sumed it up well from my perspective but would add the fact that a good room is the wild card in the equation. It can transform a very good system into an outstanding one. Outstanding components and a mediocre room will not equate to an outstanding system.

Two critical points, one already mention, one not. It definitely matters what the upper end of the scale (100) represents and how valuable that is. My daughter avidly plays cello and is quite happy listening to classical music on a boom box. I'm not a musician, but get totally into getting a drum thwack to sound right on my system. The original post targeted 100 as indistinguishable from live, which implies valuing greatly that last little bit of "realness", which I think moves the price/performance point up quite a bit. Somebody new to building a system asking the same question, I'd put it quite a bit lower since you can get pretty phenomenal performance at pretty reasonable cost (certainly less than $10K). The other thing that seriously affects the knee of the curve is the type of music you want to listen to. Getting down into the 20's in terms of frequency response is very expensive, but also essential if you like organ music. If you're going to be listening to Metallica and Dream Theater, you probably don't get anywhere near the benefit.

Kthomas, I think I followed, but I'm not sure. Where would you put the various dots of the curve?

I listen to mostly rock/pop, with occassional jazz and vocalists thrown in. I don't listen to orchestral works, chamber music or organ music. That said, the point where price / performance begins to level off in terms of dividends are: Transport - anything reasonably reliable - a good DVD player is a good start, but even a good CD changer used just as a transport. Speakers - $3500-5000. Beyond that, you're looking for deeper bass, quite possibly below anything that comes into play in the music I listen to, and better "resolution" (instrument separation, etc.), which again is not super relevant in studio-recorded rock / pop / metal cd's. It's still nice to hear depth and separation, and you get progressively more up to this point, but the value of going the last nth degree seems dubious to me. There are so many excellent choices in this range too. Amps - only have experience with solid state - $2500-3000 for a two-channel amp, somewhat more if your speakers require real muscle. CD player - $1000-2000, probably weighted more to the bottom of the range, but there are a lot of $2K cd players I've never heard so I won't try to be absolute. DAC - $500-1500 depending on your upgrade strategy - chips just keep getting cheaper, and things seem to be changing fast. I won't even attempt to suggest a price for speaker cables / interconnects, but will say that I'm very satisfied with well-built, moderately priced cables of all types. These are the points I would put on the individual pieces of a two-channel system where you begin to have to pay significantly more money for significantly smaller improvements in a system that is for playing the type of music I describe in a moderately sized, dedicated listening room. My experience has been that on the way up to these price levels, the difference of say 50-100% in cost (say $1500 speakers vs. $3000 speakers) is large enough that you immediately hear differences, and that they're recognizable enough that anyone will hear them if they're not adamant that they won't (or mad at you for spending the money and not wanting to admit you got something for it). I've often wondered if some of the differences of opinion over what is "an amazing difference" and what is "a difference I think I heard" when two different people are discussing the same equipment is highly tied to the type of music they listen to, and I am completely open to the notion that somebody who listens to primarily classical music would value the difference a, say, $3K CD player affords. Their points are quite likely all higher than mine.

Thanks for the response, Kthomas.I've noticed that as my system has improved, I've appreciated classical more. For one thing, classical, particularly orchestral, is much more dynamic than rock, and a system that will reproduce those dynamics is really delightful sonically. Also, the unnaturalness of electronics and electronically hyped recording can be exaggerated with a good system. The fact that classical is almost exclusively created with acoustic instruments seems to mean you're less likely to get those awful glaring highs that you sometimes get with rock. Still, I'm not listening to anything near at $3K CD player.