Starting over

Consider Shanling MC-30 all in one - tube integrated amp, radio, CD player, iPod dock. It can be had for around $700. The only problem is its power rating. Since it is only 3wpc class "A", it needs to be matched with very efficient speakers.
Omega speakers come to mind ..... but if you are interested to put in some of your own sweat into DIY high efficiency speakers project, you might be very pleased with the outcome.
If interested I will be happy to help.

Mariusz

The shanling is way too weak for anything but the most efficient speakers. Going with any of the Music Halls will get a lot more power and you can get a class A amp which will get you a lot of warmth. I've seen them used for $500-700. 50 watts will drive most speakers.

The New Bose Acoustic Wave Music System 2 !

Headphones are the way to go, without a doubt. I like the Sennheiser HD600s ($350) or the HD650s ($450) and the Pro-Ject Headbox SEII ($300) amp. Then get yourself an iPod or a computer with a decent soundcard, anything that gives you a pure output, use lossless music files, and you will be stunned at how good it is.

I also have the N802 and those $350 headphones hold up really well against them.

One way to start over for less than $1000 is to go with the Fatman - iTube - Stereo Integrated Amp w/iPod dock. You get a tube hybrid integrated amp with 13 watts per channel and an iPod dock. Audio Advisor has these on sale for $400 w/o speakers, and $500 with speakers. Add an iPod, a pair of small monitors (if you don't go with the "with speakers" choice that Fatman offers) of your choosing and/or a set of headphones, and you should have a MUCH better than average sounding iPod based system. Down the road when you finances improve, then the Fatman system would make great second system in a bedroom or office enviroment.