Thanks for the input, this is kind of what I was afraid would be the case. I am using on board audio, although the electra is the same impedance (32 ohm) and sounds better with the on board. It may still be worth trying a source upgrade, since I'm guessing even if I go to more expensive headphones that will still be a barrier.
So.. to upgrade my source, is it better to go with an external Amp, soundcard (ie Asus Xonar DG), or external DAC/Amp? I was thinking an external Amp as this would give me more flexibility to use it with sources other than my PC...
omg... noooo! From your $40 headphone budget, you are definitely looking at this wrong.
1.) Ensure your audio files are high-quality. This is usually just involves re-ripping your CDs and is FREE!! :) This change is the biggest & easiest change to perceive. after you reach 320kps, the upgrade in sound is very hard to hear.
2.) Increase your headphone budget. I would get a $100-150 pair of headphones that are generally thought of as a good value per dollar. Spending anymore will probably be decreasing returns per dollar, but any less, you probably can perceive the lower sound quality.
Example would be the Audio-Technica M50. I've never heard them, and I do kinda think they are over-hyped, but the general consensus is they offer incredible sound quality for the price point. They are $122 on Amazon right now. There are probably a ton of other great options at a cheaper price point, but none so universally loved. lol. Instead of buying two crappy $50 headphones, you can just get one nice pair of headphones.
3.) Use a equalizer to tune the sound signature to what you like.
Sit back & enjoy.
Sound cards, amps, and those things make a really small change in sound quality for the amount of money you need to throw into them. That is the same thing as buying a super high-end AV receiver but using VHS (audio file) on an old box crt TVs (headphones). The two biggest factors is audio source file and actual speakers/headphones. Everything else is limited by those two things.
That is why the first thing people do who want better sound is simply buy better headphones! Not new computers/sound cards or amps. Think about the sound-cards/amps in portable media players. Definitely not as good as a cutting edge dedicated sound card, but hard-core audiophiles are still can get great sound using them.
Edited by money4me247 - 2/28/13 at 6:32pm