I'm in grad school right now, so stereo funds are extremely limited. Also, I move around a lot; I've lived in five different places in the past two years, so I need something small and reasonably portable.
As for a source, I just use my iPod for now, but I have a Quad 99 CDP/2 on the way, so I'm excited to hear how a quality CDP will sound.
The photo above shows my stereo in my place for the summer. I moved from Colorado to Delaware to do an internship, and I'm living in a really crappy student apartment. My system sounds alright in this setup, but would love to have better acoustics.
You might condsider using your computer's hard drive as the music source rather than the ipod - if only to make it easier to control the sequence of the music, etc.