The Sound Blaster Live! isn't a very good board. :\
I don't hate it as much as a lot of the people here seem to, but it's
far from optimal in regards to sound quality. My board had a nasty, distorted-sounding hump in the midbass, almost like it had a lousy XBass/Bass Boost thing on all the time. The hiss on my board wasn't too awful with the various inputs muted, but, still. Not very good.
I'd second the recommendation of the
Chaintech AV-710. $23.50, with free shipping, for a huge upgrade in sound quality. Good deal.
If you want to stick with your SB Live, I'd suggest using the kX drivers, as linked to in this thread...but I managed to kill a computer that was using them by my own incompetence, so I'll refrain from "helping" you with them, for obvious reasons.
As for speakers...multimedia speakers in general are pretty lousy. If you insist on using them, the Logitech systems are OK. Not hi-fi by any means, but pretty decent for gaming usage and system bleeping+blooping. If you're into music, [size=xx-small]and I'd guess that you are if you're here[/size], go for headphones. The Sennheiser HD497's seem to be pretty popular in your price range, and, even combined with the Chaintech sound card, you'd still be well under your budget. I'm sure some of the more experienced members here can help you spend your money better (and quite possibly more of it) though.
[size=xx-small]and headphones are often better than surround speakers when it comes to gaming, anyways.[/size]