Need help narrowing my focus

Hi guys, I'm a sound lover just like all of ya'll but I have never really delved into the details of audio equipment until now. Basically, I have an opportunity to spend some money on audio equipment and I want to make the best of it.

I have been clicking around the internet for many hours and I am finding myself very lost as to what components are most relevant to me given what I already have and what I want to get. I asking for some guidance on what I should be focusing on given my specific pretext. Pointing me in the right direction and pointing out important terminology would be very helpful.

Here is what I have:

1) A very fast computer (quad core, 4g ram, etc)
2) Legit mobo with 7.1 output, AC97 audio, Realtek HD audio drivers.
3) Onkyo ht-sr800 speakers in a 5.1 surround configuration. Not using 2 of the speakers. The receiver and subwoofer are pretty sweet. Speakers = meh.

Here is a tech summary of the Onkyo system:

http://electronics.pricegrabber.com/...t=product_tab/

What I want to do:

1) Utilize the Onkyo receiver and subwoofer with some decent studio monitors since the 5.1 speakers are a) not that good and b) most of the time I am listening to stereo audio sources. I am looking at AV40's although I might want to go with something nicer depending on the overall cost.

With regard to this point, I have a few vague questions:

Given that I have a (I think) decent receiver and I listen to FLAC/MP3/etc, what essentials should I look into getting to get my sound from my hard drive to my speakers. I'm really confused about the relationship soundcards vs DACs vs amps vs preamps and which ones are important given what I already have.

Also, I am assuming on-board audio is a no-no in the audiophile world, but perhaps I am wrong. Is there a way to 'do it right' with onboard audio?

2) Also, I want to optimize my setup for to using headphones. I can plug into my receiver, but I'm not sure what is optimal. Is there much to be gained by using a separate headphone amp vs the receiver's 1/4" output. I am guessing this depends on the specs of the headphones. This is one of those contingencies that is making the overall optimization quite tangled and under-constrained hence the point of this post.

Overall, I am looking to build a well-rounded set up for listening to many different types of high-fidelity music. I am a big fan of modern jazz, like The Bad Plus, as well as alot of acoustic instrumental style music (Lenny Breau for example). Every so often though I will listen to some metal, hip-hop or classical.

Thanks in advance,
Azriel

Thanks for the input.

Thats a good point. In light of what you said I am thinking of the following setup for my desktop comptuer, which is currently the source.

Actually, the sub actually has its own dedicated amp and is pretty powerful. I cannot comment on its fine characteristics of performance, but I like it.

Currently have:

on board sound --> receiver --> speakers + sub.

I want to buy some nice passive speakers, and I am pretty sure that I want to get a pair of M22ti's because I heard that they are amazing, but best matched with a subwoofer. For sound source, I want to get an E-MU 0404 USB. I think i want to do some recording and I want to be able to use the 0404 on my laptop sometimes. So new setup would be like this:

computer --> EMU 0404 --> Receiver --> M22ti's + sub

Headphones will either plug into the EMU or Reciever, whichever is best. If I find that I'm really unsatisfied, I was thinking about getting a Rega or some other affordable but decent headphone amp, maybe one of the ones you suggest.

Feedback by anyone is appreciated in advance.

Thanks,
Azriel