There are a few top tier headphones that are in my opinion significantly better than the rest. At the bottom of that tier (as constructed by me) are the HD800's. Others in this realm include AKG K1000's, perhaps K340's, maybe the Beyer T1's Stax Omega II's, a Stax 404 setup and some unobtainable hp's like the Sony R10's (which I haven't heard) and the Sennheiser HE60/90's and a few others. For me, it isn't worth spending more than $1000 dollars on a rig that isn't based on one of these headphones as there just not enough room for potential improvement to justify the cost. With 1000 dollars I'd probably buy a good portable amp, a RME dac and a pair of Beyerdynamic DT48's (though many don't like these). That setup would get me close to what I experience listening through K1000's. The DT48's are rare in that regard however, most headphones (Grados, Ultrasones, Sennheisers etc,) are not worth the dough at all (for me).
Though I haven't heard them I would bet that HE5's are pretty great also.
If I were looking to exceed 1000 dollars I'd go with a system based around K1000's as they/it would improve tremendously with better equipment. I'd also seriously consider Stax Omega II's as many prefer them over the K1000's. The difference between those two headphones and D5000's (which I own) mentioned in a previous post is night and day.
If you browse through this forum you'll see many words thrown around which describe the nature of sound as reproduced through headphones. While these are good descriptors they don't really benefit the buyer. When purchasing audio related equipment I think it's important to abandon the jargon and pay close attention to the physical properties of the driver and the headphone. Ultimately what one should look for is the speed of the driver, and the placement of the driver/its enclosure. Faster driver speed=better detail, resolution, accuracy, etc. Well engineered driver placement= better soundstage, imaging, etc. Some people claim they prefer coloration and a warmer headphone. Nonsense. What that translates into physically is a more lethargic driver. Real headphones strive for dead neutrality/speed. For me I let the recording to the coloration. One thing to note however is that while faster dynamic headphones will be more accurate, inherent to their dynamic construction (bulkier driver) the stiffer driver and membrane necessary to achieve such speed can in some instances diminish the bass. Simply, the driver's stiffness prevents it from vibrating below a certain frequency. This is not true for higher end electrostatic headphones as their thin membrane enables reproduction of the entire spectrum. The tradeoff here however is that the bass is less visceral than a dynamic headphone as the thin membrane of an electrostatic headphone can't push as much air as a dynamic headphone. Note this is a slightly truncated description of what's really going on however this is the basic principle. Also electrostatics push and pull while dynamics just push. Electrostatics are better.
At the end of the day you may find yourself choosing between electrostatics and dynamics. There are only a couple headphones (that I've heard), the K1000's being at the top of that list, which is on par with electrostatic headphones. The vast majority of dynamic headphones are inferior to a middle range electrostatic headphone. So unless you have the option for a pair of K1000's in which case rethink your choices, or are willing to sacrifice some bass and treble for one of the most underrated and excellent musical experiences one can have for under $1000 (DT48's) I would say go electrostatic.
At the very end of the day (dusk has passed and it's night fall) I would say save your money and get a Playstation 1 as your cd player, a good pair of electrostats, some cds and go to bed. Or get a Berklee dac.....
As an addition to what I just said, personally I think stepping up the latter is stupid as it implies that money determines the quality of the product. While my post up until now may seem to agree with this mentality, and for the most part it's true, there are exceptions. Cheap stax systems will outdo most highend dynamic systems all day. DT48's will outdo most dynamic headphones. The price of things is determined by commercial demand. The quality of things is determined by the intention of use. DT48s are an industry standard for engineers hence the quality. The materials for the HD800's and the DT48's probably cost about the same. The r&d costs of the HD800's are obviously much higher which, in economic terms, justifies the price. Mystified by fresh looks achieved by superficial aesthetic decisions, the buyer is willing to spend the extra money. Neither costs more than 50 dollars in materials however.
I've browsed this forum for about 7 years. I started with a pair of K701's which I recently sold. Between then and now I've owned tons of different headphones. For the most part, my experiences have been pretty consistent--boring. To me most headphones aren't worth the money. While there has been some wow factor at first, the flaws have been too glaring to warrant long term appreciation.
Certain accurate headphones from stax akg and beyerdynamic have really inspired me and have defied this experience. The main difference these hps exhibit is neutrality. And as a result I could spend my days listening through them (which is not true with most hps I've owned). Don't waste your time and money searching for your coloration of choice as it doesn't exist (except in fairyland). Test a bunch, find the one that sounds the most natural to you, and buy it. I'm sick of rambling so I'll leave it at that.