kims in the village, virgin in union square
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J&R has an excellent selection of CDs and a decent supply of SACDs ... at some of the best "New" prices in NYC. Virgin also has a very good selection, but at higher prices.
Kim's on St. Marks has one of the better selection of "Out" and independent jazz, including European improvisors and a decent selection of used cds.
If you are predominently interested in used jazz CDs, Academy on 18th, between 5th and 6th is one of the best. They do not, however, have many SACDs.
Finally, Downtown Music Gallery at 342 BOWERY, between 2nd and 3rd is actually mostly jazz (mostly new, but with some used), with a special emphasis on more experimental music ... especially of the "Downtown" variety.
For jazz, the best store in NYC is by far the Jazz record Center, 236 W. 26th Street. It has vinyl, thousands of new and used CDs, and a huge selection of jazz DVDs. The owner, Fred Cohen, is extremely knowledgable. If you are looking for something and don't see it, just ask. Academy, on 18th Street, is also pretty good, and the two stores are within 10 minutes from each other. Have fun.
P.S. The Jazz Record Center is on the 8th floor. You must ring the bell from the street to get in.