What is your experience with the law of diminishing returns ?


As subjective as it might be. Personally, I have not encountered it yet.
inna
No experience so far. $10k power cord replacing $1k power cord with $5k preamp or power amp, anyone ?
Rather than the oft used 'diminishing returns' I believe it's far better to utilize Ordinal Utility or/plus expected utility from decision theory ... at least in reference to our choices with respect to this hobby, and the OP's question.

+1 @folkfreak 
Actually it is the opposite -- the more optimized your system the more apparent marginal changes are -- there's a law of increasing returns to tweaking
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