Headphone Amps and Portable/Personal Stereo???

I've ordered the top-line Grado RS1i Headphones for $535 brand new. I'm a very poor audiophile so I'm never going to be able to afford the audio system I really want. I thought maybe I could put togeter the most amazing personal stereo system to enjoy music.

I'm considering the Musical Fidelity X-CAN v8 for a head amp but it's a little too expensive ($499 on sale). Also, I don't know what source to use...mp3 player?, portable cd player?, standard cd player...??? I know very little about mp3 or their quality, or how they interface etc. Anybody have any ideas? I'd be mightly appreciable for your help.
I would not recommned the MF for your phones and think it would sound bright. Impedance matching is very important and the grado has a low impedance at 32 ohms. Actually I would listen to the RA-1. I use an RA-1 battery unit with Ultrasone 2500 with great results. Very natural, organic sound. As a bonus the Ra-1 will give some level of portablility as well. I would recommend a std cd source although it is not clear about your portability needs.
You should decide wether you want a portable system or not. The MF is not portable. I think you can get substantially better performance if you don't require portability. Personally, I would look for a used Stax SRM-1 with Lambda Pro combo in the $500 range. Add a good and inexpensive cdp, and you will have amazing headphone listening.

Good luck.
I would not recommend mp3 files but if you get a big enough digital player and use a lossless codec you should be fine. If you do some research at head-fi.com, you will get tons of info on headphones.
Get a Benchamrk DAC1 - it has an excellent headphone amp and you can feed it any old digital and it should clean up the jitter pretty good. If you like precision, clarity and dynamic sound then the Benchmark is great value - just no bragging rights as it is pretty much a standard for many people who prefer value.
Keep it coming folks. Your advise is helping me!

I don't know about portability yet. I would not want to sacrifice too much in sound. I'd settle for semi-portable so I could share with some friends or listen WITH my wife (2 sets of phones simultaneously...maybe). I don't need walk-man like portabiltiy (or else I'd get a Walkman).

The battery powered has appeal because you don't have to worry about AC grunge but it wouldn't be portable with a standard CD player so it's seems portability might be a mute point if I go for quality.

Is there a mini-cd player or an excellent portable? How about a portable with a DAC? What lossless codec and what mp3 player? What software for cd transfer?

The main thing I'm looking for is world class sound at a bargin$$$...sitting in my lazyboy. That's why I spent as much as I did on the Grado phones. I really don't want to spend another $1000 though.
I just bought an Audio-Gd C-2C headphone amp following research though the Head-Fi site. Price was $335 plus delivery (from China). I'm utterly stunned by the sound quality through a pair of AKG 702s - significantly better than the Benchmark DAC which I tested for a fortnight. Audio-Gd have another model, the Compass, which has been designed in conjunction with 18 Head-Fiers who received test units. The Compass is a DAC, a headphone amp plus a pre-amp, so extremely versatile - has received rave reviews and could be another very good option at a promotion price of $258 plus delivery.
Eastern electric CD player can be had for about $650 used. That's all you will need. It has headphone jack and volume control.
Something else to consider for the future is an inexpensive vintage direct drive table and a Bellari VP-129 - same story of headphone jack and volume control. Chances are good you could put all of that together for under $1000.
Third, and possibly best, option is an old NAD preamp for $125. It will have a headphone jack, a multitude of inputs, a phono section, and you can run your computer straight into it. I did this for both my boys with Grado SR 325 cans and they love it. Great bang for the buck.
I went through the same process awhile ago. I did a great deal of research and settled on the Shanling PCD-3000A CD/pre/amp all in one small compact size. This CD player (not portable) has a built in headphone amp and comes with a full function remote. It retails for $500.00, and can be found for less. There are some people who are modifying these, and this might be something to look into in the future.

Also there is a twin amp unit that allows for greater power and dynamics. This too could be a future step, so this simple start could be something you allow to grow over the years.

I have been very pleased. I use it with Dennon headphones, it is next to my bed and I use it every night to shut my mind off and prepare to sleep.
Don't think of the RA-1 as a compromise because it is a battery unit.
The RA-1 is basically a CMOY, which you can find all over ebay for about 30 bucks. If the wooden enclosure means a lot to you go for it, but I'd personally never buy an RA-1. I'd recommend looking for something like a used Gilmore Lite.
Not Sure what CMOY means but if $30 gets you an RA-1 sounds like a bargain. Condocondor, Try the RA-1 either used or from a reputable dealer where you have time to return it if you do not like it...I think you will be surprised.
Rello- CMOY is a headphone amp, built from an "open source" design by DIYers and some small shops. Search head-fi.org and you'll find a lot about it. No idea how the circuit compares to an RA-1.
Hens, thank you for your suggestion regarding Audio-Gd. Unfortunately, my wife, who is psychic (seriously)says this company steals other peoples' designs for which her "Spirit Guide" does not approve of or agree with. I guess it's an integrity thing. I was really encouraged when I went to the site but the wife says, "NO WAY" for this company.
N3rdling- have you ever listened to the RA-1? RA-1 with Grado phones?

Condocondor - do yourself a favor and try an RA-1 if you get a chance. With your phones especially. There is a level of texture and natural sound that you will not find in other amps especially in your price range... MF, Creek, CIadudio included. Sure some other amps might have more bass (not that the Grado is lacking) and dynamics but none will sound as good.