Where do you start? Is there any hope?

With all of the information to process, where does someone start. I love both music and movies, but want to get the best 2 channel I can for the money.

I would like to get into a cd system that will let me enjoy variuos types of music. But I am on a Cracker Jack budget.

Is it possible to get started with about $500.00 or should I just buy the IPOD and some headphones?
There is always hope. I have a friend who has assembled some really great sounding systems for under $50 from yard/estate sale components. It's not easy, he gets there before anyone, and there are some risks involved, but it can be a avenue, and probably the cheapest way to go. Another strong aspect is if your newspaper lists stereo equipment, many people spend up to $1500 for a full system, and need to move, or something and you can easily get a system for under $500. A lot of it is going to depend on what you want to do, you can't expect perfection on a $500 budget. But all the main focus should not change, and that is to make you happy with it. It would even possible to assemble a real decent system of speakers, amp/receiver, and a DVD player from ads here on Audiogon. Shipping may add some costs, but the savings on real decent entry products does exist here. Try negotiating a little maybe. You're not going to be getting real fancy in the cabling, but again there are lower priced options available. See if anyone you know has any equipment they may be selling sometime. Listen to some things if you can, find out what you don't like.
my first system might be a good starting point for you...i had an old NAD 7225PE receiver (look for a 7240PE or more powerful integrated if you can find one)...I also had Vandersteen 1b speakers that I consider pretty damn good for the price in my opinion...(they are heavy though so factor in shipping)...then i just ran a vintage 1993 dvd player through it and voila...for me at least...I...like yourself...want the best 2 channel for my money so you'll see that 12 years later...i still have a 2 channel HT...and actually...the one on my system page is being given to a friend when i move (in exchange for some painting help...lol) and when i upgrade everything...it will still be a 2 channel Home theater...but will probably be in the 10-15k range...yikes...maybe you should just buy the ipod and headphones and run while you still can.

good luck

just my 2c

Is it possible to go with a preamp/amp for so little cash?
I would like to stay away from a reciever. Are there any ecconomical CD/DVD player or transports out there?

With such a tight budget how should I break down the budget.
separates?...highly highly unlikely...i would break 500 down into 250 for speakers (used) 150 for an integrated amp (also used) and 99 bucks for any new name brand dvd player with a bit of a warranty. with the last dollar...buy a lottery ticket because you'll need at least 30 bucks more for all the cables...and that is on the CHEAP....and hey...you might strike it big with the lottery and get those seperates...start shopping the classifieds here.
I have a older set of speakers and some wire and rca they are not top of the line, but I think they are nice for now. The cables are cast offs from friends. Mostly monster, AR, RCA gold, and audioquest.
How about this approach? Try to find an old Denon CD player or something similar with a variable volume output, so you can attenuate the volume without a preamp. You can probably pick up something decent sounding for pretty cheap. Then look for an old adcom power amp, like one of the old GFA 535's. They were only $300 new, so if you can find one, that shouldn't set you back too much. Nextyou might consider some small used monitors like the new Epos 3's, that later on you could rotate into a home theater set up, at least for back channel speakers. I could see how you might put this together for $500-$600. It would get you into the separates manifold, give you sound you could live with for a while, and let you upgrade as you have the cash. Later on you could add something like a McCormack TLC-1 preamp, a newer CD player, etc. Most set ups don't need gain from the pre amp to deliver more than adequate volume, especially with reasonably efficient speakers.
Back in the late 80's, I ran a Denon 1520 CD player through its variable output into an Adcom GFA 535 to some ADS speakers. It was a pretty decent sounding bare bones $1500 system. Go Bucks!
Fot a newbie thats pretty darn smart there!
this is it....
onix A-60 int. amp. loads of power for HT dynamics, and the bass..., clean detailed sound with great imaging for music. used consistently $150 .
sound dynamics rts-3's, nuff said, used consistently $150. might be tuff to find though.
toshiba 3960 or 4960, look on ebay, pay no more than 70 bucks(and that might be alot)for a new one. they're there.
lastly,with the $150 or so left over, goto audioadvisor.com get some stands and maybe a closeout rack, then email paul speltz and get some cables. you now have a system that will rock and refine, i promise cuz i had it...
Aw shucks!
What is a sound dynamics rts-3?

What is variable volume control?
Is that any good?
Is the sonic impact any good?
Variable volume is simply a level control on a cd player, so when you hook it directly to an amp, it becomes your volume control, this is a very good way to go for both cost and sound quality, less equipment in your path will give you the best sound possible, and in your case save you money aswell.
As for sound dynamics rts3 that is simply a model number of a peice of equipment....I think a speaker but dont quote me
the sonic impact is quite good. it sounds very clear, detailed and full. however the bottom octaves ar a bit rolled off, and speakers will need to be decent efficency. i ran 86dbl fronts up to about half volume on the sonic impact before distortiion became noticable. it was loud, but if van halens jump came on you'd definately want more juice than it can give. does that make sense? anyway sound dynamics rts-3's are a bookshelf speaker. the company is now called athena and the bookshelves under that name are similar in build and price. i have not heard them however, but they are supposed to be as good as the original. oh
Honestly, don't start. If you haven't started, walk away. Get the iPod and forget about it. Keep your sanity and just walk away. If you really love music, buy a guitar or a piano and learn to play, but forget about electronic audio. It has no endpoint.