Why does better power = better sound?

3 and 4 is same as 1 and 2 - greater dynamic range requires good current delivery and low noise.
Instruments won't have natural timbre thru noisy gear that compresses dynamics.

5 - Imaging is related to noise as well but also to crosstalk, often thru common power supply. Power amp supplies are most likely without line and load regulation with inductive capacitors. Separate power supplies for each channel or even separated amplifiers (monoblocks) will reduce crosstalk.

Jeff Rowland started using sophisticated switching power supplies in latest model 625 (class AB power amp). It switches at 1MHz (easy to filter out) with zero voltage/ zero current switching. It delivers clean voltage that is line and load regulated (not to mention efficiency).

Linear power supply is also a switcher operating at 120Hz where switching appears in worst possible place - at maximum AC voltage. Current is supplied from mains in sharp narrow spikes. Width of these spikes changes with load (switcher's definition). 120Hz ripple is difficult to filter out and requires a lot capacitors. Transformer has to be huge for good performance. In comparison same power transformer operating at 100kHz can be 10x smaller. That's the future in my opinion. Jeff Rowland already uses switching supplies to obtain low noise in preamps (Capri) where efficiency is secondary issue.

Bifwynne - I use Furman Elite 20PFi, a power correcting 20A conditioner with non-sacrificial over/under voltage protection. I don't see any difference in dynamics possibly because in addition to large inductor in series with power outputs it also has huge capacitor. They claim 55 amperes of available peak current. There is some change in bass performance making bass more musical (more even), but the biggest improvement is in purity of the midrange. It also gives me sense of security protecting all my components during thunderstorms.

Bifwynne, new Elite 20PFi is $1019 at Audio Advisor. I bought used for $600. New Elite 15PFi is about $699, used currently listed at Audiogon for $350.

Al, you know your Beethoven - I'm impressed.

Arnettpartners, I bought 20A version only because I suspected that it might affect loss of dynamics (if any) a little bit less (smaller voltage drops) and to be ready for larger amp in distant future.

Yes, It has 12 outlets divided into 3 banks of 4. One bank for power amps or subs(Rowland 102), another for video (HDTV, DVR, Bluray) and third for audio (Benchmark DAC1, Airport Express, Toslik/coax converter). Two of each four outlets are 12V switchable. In addition there are overvoltage protectors for the coax - I use one but perhaps not much help for my roof antenna - in direct hit everything will fry anyway (including house). For cable TV it is a must.

Yes, It has 12 outlets divided into 3 banks of 4. One bank for power amps or subs(Rowland 102), another for video (HDTV, DVR, Bluray) and third for audio (Benchmark DAC1, Airport Express, Toslik/coax converter). Two of each four outlets are 12V switchable. In addition there are overvoltage protectors for the coax - I use one but perhaps not much help for my roof antenna - in direct hit everything will fry anyway (including house). For cable TV it is a must. Make sure this Elite is PFi since I think this Power Factor correction provides this big capacitor and 55amps of peak current.

I unplug during thunderstorms too when I'm at home. There is one feature of PFi20 that is strange. It has two black plastic tubes with strong LED lights inside that you can pull and direct. It is intended to be on the upper shelf of the audio cabinet shining light down on other elements of the system. For me it is useless (bottom shelf of TV rack) making it larger than necessary. I don't mind width (standard) but it is a little deep. Perhaps not more than typical audio rack/cabinet can handle but still.

http://www.furmansound.com/product.php?div=02&id=ELITE-20PFi

Most "cheap" voltage regulators are less than 2.0% regulation like a LM340

If I remember correctly LM340 has 0.01% Vout/V line regulation and 0.3% Vout/I of load regulation. Perhaps you had in mind output voltage tolerance that is indeed 2% in the best case, but is completely irrelevant to operation of audio power supply. In addition power amps are mostly unregulated or have SMPS.