yes you do need the amp to run the speakers properly. the $1 a watt mantra is good to a point, since while there are companies out there (arc audio, hertz, audison, boston, etc) that will charge that much for them, there are others that are just as good for less than those big companies. dont look at the prices to judge the quality, listen for yourself. the companies these guys are telling you are incredible companies and make really good stuff, however they are also designed for high end SQ, and while that IS what everyone wants, some ppl dont want to spend that kind of cash on speakers. ive heard some MTX components(oddly enough, lol) and some RE components that honestly the SQ difference between those and some of the higher end components were negligable at best. not to downplay the high high end equipment, they are great, im just saying that to YOUR ear you may not be able to tell much of a difference. and if you cant tell then why spend the extra $? it just seems to me that the whole car audio scene has become "ya well i spent $x on my system" oh ya well i spent just that much on my amps". it just getting a little ridiculous to me, mind you thats just what im seeing in ppl ive been dealing with. you just have to be honest with yourself and what you like, and your budget. while the budget you mentioned is decent enough to get really good components, after amps (the $1 a watt at 400-600 watts, thats $400-600 for just ONE amp) will get pricey FAST. we can all give you recommendations on what to get and what will sound best based on our professional and personal opinions, but in the end its what sounds best to you. everyone hears differently. i personally will roll out a lot of my high high end like 5KHZ and up like 2-3 DB(does that sound right cuz i cant think of how to explain how i tune things, lol) cuz i cant stand that sharp S, CH and P sounds. i prefer a softer sound to my lyrics and music than some people do, and with some components they will always reproduce sounds like that, while others may not. i chose what i chose in my car because of how it played my music to my liking. does that mean you'll like it in yours, not neccesarily. e.g. polk audio components tend to have like a boomy mid driver while the precision components in the same range do not, they are more rounded sounding. its all on your personal preference.
look into the companies that have been suggested, and stay away from all the mainstream hype. choose what you think sounds best to you and go from there. just my suggestion.
as far as the MP3 vs CD and what you were saying, sometimes when you put songs on a flash drive or something it compresses the files and makes them not sound as good. make sure everything is not compressed. thats the only thing that would really change sound quality. how it was taken off the CD should sound just the same on an MP3 device. the compression is what makes it change.
