Thanks all for an interesting and enlightening thread. I even enjoyed the points I don't agree with.
I've learned some important lessons from nwavguy (banned at head-fi, unfortunately). In case you missed it, his premise is that the combination of competent design, decent components, and solid execution (pcb layout, etc) can result in systems that work well in a demonstrable way without costing all that much. Without all those elements, you don't exploit the potential of the components (i.e. you throw away dynamic range, increase noise and distortion, etc). Fancy design approaches and expensive components hyped by the manufacturers of expensive gear don't guarantee anything without skilled execution at both the design and manufacturing levels. As an engineer, that viewpoint appeals to me.
His view seems consistent with the mountain bike analogy made earlier. The real values are found in mid-range components that are executed well. Personally, i enjoy finding things that don't cost all that much but work well from my perspective. As an example, my Grado SR80s were my head-fi gateway drug, I can't think of a more satisfying purchase.
I also liked the comment that most systems sound better with beer...
