Don't forget that the computer components make a big difference as well. I could tell a big difference with mine when I upgraded.

I have the Klipsch ProMedia 5.1 setup. For me, mp3's are close enough to CDs that I just don't care. My focus is on websurfing, playing games, or whatever. The music is a nice bonus. I don't know how to quantify how much the speakers might be limiting things though. They're very good for computer speakers, but pale in comparison my HT.

Once you go down in quality you can't get it back. Butning the mp3 to CD format is really just converting it over to the .wav format. The original .wav file will be better than this new .wav file despite the size. Actually, it'd be interesting to see how the two of them compare in size now.