Two Type of sound and listener preference are there more?

I suspect this whole debate, a debate that pits one camp against another camp is probably a holdover from the 80s when such limited views of audio were developed and promulgated by audio magazines and reviewers and audiophiles. What is needed, I submit, is a paradigm shift away from these rather cliche views of sound and sound preferences toward a new definition of great or ideal sound, if there can be such a thing. And what is it audiophiles are really trying to achieve. Start with the premise we’re stuck with the recordings we’ve got, there’s no going back, for better or worse, and try to figure what is still wrong with playback system that keeps holding us back. There’s nothing that can be done with overly compressed CDs and vinyl save reissuing them in restored dynamics but that appears rather unlikely. Not everyone listens to iPods. But the die is cast.

I’m most definitely in the second category.  And more so with the changes I’ve made to my system. 
As a long time professional fine art photographer, I’ve often wrestled with the issue of ‘accurate reproduction’ of reality. Finally understanding that, for me, it is a photograph I’m creating, not a record of what was in front of me at the the time. but rather an expression of my perception of that reality.  And a communication of that perception. 
i find the reproduction of music very similar. In the end it is an interpretation of the performance we hear, no matter how close to parity with a live performance we come. So why not make that interpretation as satisfying as possible, by whatever means?   Maximizing the pleasure of the listening experience is subjective, by definition.  Accuracy in some objective measure is irrelevant to me. 

There are two types of people in this world, those that divided the world into two types of people and those who don't.  As others have pointed out, it's far more complex and nuanced.

Type One: Detail, clarity, soundstage, the high resolution/accuracy camp. People who fall into this camp are trying to reproduce the absolute sound and use live music as their guide.

High resolution and accuracy should be a path to excellent tone.  We are all at the mercy of the recording, but a cello should sound like a cello.

Type Two: Musicality camp, who favors tone and listenability over the high resolution camp. Dynamics, spl capabilty, soundstaging are less important. The ability for a system to sound real is less important than the overall sound reproduced "sounds good."

Musicality and high resolution are not mutually exclusive.  I believe most experienced audiophile seek the high resolution coupled with long-term listenability.  In blunt terms, many audiophile oriented systems have too much treble when compared to live, unamplified music.

Finally, there's a common sense consideration.  Does it really make sense to spend tens of thousands of dollars putting together a system that only sounds "good" on a limited number of recordings and makes most of the music you like sound crummy?   Again, we are at the mercy of the recording.

Broadly speaking Dave is absolutely right.

Some people like the real thing and getting as close as possible to that - true high fidelity.

Others don’t care so much about accuracy - they want their system to enhance the sound with musicality (musicality being their preferred presentation). This is not high fidelity but it is immensely enjoyable and fun - a bit like cooking to your own tastes rather then strictly following a recipe.

Ultimately what are we trying to achieve. Sound that is engaging, clean, clear, nothing harsh that hurts our ears? Two or three guys sitting around a campfire at night with acoustic guitars and a Cajon singing is as real as it gets. Trying to record that moment and mix it and replay that through an amplified system can never be exactly the same. IE your position to the live music, backround noise, mics, recording equip, ect. I am an audio engineer and mix live music. I ultimately change the way people will hear the musicians. Every event has its own acoustic challenges. I use my ears to accomplish this. I add and subtract different frequencies to make it sound as close to how I think it should sound using my lifelong experience as an avid audiophile. A different engineer will make it sound different because of his preferences. My point is that what we try to achieve in our home systems is very personal. I have spent a lot of money on my home system just because of my love of music. Every piece of equipment adds or subtracts some color in the experience. There is no right or wrong. Our brains perceive things differently. I can be from both camps depending on the music and situation. We are all unique with different ears and brains so its allot more complicated than that. Is there audio nirvana? I think I will only experience this in heaven.