Can a high end sound from mid-level gear?

Yes. Even from low-level gear. Matching modest components with higher quality speaker cable and interconnects that optimize the sound potentiality of your amplifier, CD player, and speakers can reproduce sound with startling "soundstaging." Speaker placement is crucial and stands may offer free of charge, sound improvement in many rooms. Have heard vintage systems that have outperformed newer high end components. Trial and error in selecting compatible components/cables can bring high end results or "ear-pleasing" results to define listening quality in another way. Quality cables can greatly improve low/mid-level gear's performance and might be an alternative if an unlimited audiophille's budget is out of reach.

For mid-level gear, the addition of Dakiom "Audio Feedback Stabilizers" actually creates a more three dimensional soundstage among a number of audible improvements.
This is not to say that all the appropriate recommendations above will not get you there as well. But, as a "quick fix" to get you started toward your goal, Dakiom is easy to recommend.
Some of the Dakiom ads here on Audiogon (which you can read by typing in "Dakiom" in the search function) come across as highly opinionated, even controversial, yet the excellent audible results are achieved at modest cost.

If you want to hear want less than mid-fi gear can do, check out the sonic impact T-amp. Even using a cheap headphone jack to RCA Y cable to connect to a CD player, the sound is pretty incredible. Detailed, full and tight bass and spacious as well. All this from something that costs $27 new at Amazon. You might also be pleasantly suprised at the panasonic Sa-XR55 Digital Receiver. At $229.00 it is also pretty impressive sounding.

Thanks for the responses, but they led to another question. Can anyone recommend a definate and RELIABLE source that will give me the basic do's and don'ts for system setup, room setup, listening posistion, speaker position, etc. I've found a number of sites online that offer just enough info to get you hooked...and this all. I've been reading the Absolute Sound and have managed to pick up a handful of tips, but I need more!

Any suggestions?