Hey, this is cool. My first post, and there's someone dealing with exactly the same, uh, "problem" as I am.
I'm a hi-fi newb too so don't have any profound wisdom to impart, just the solutions I have arrived/am arriving at, and what I've done to get there. I have gotten some help from a friend of mine who's been into this stuff for a quite a bit longer, though, and have done some reading up.
Speakers: said friend of mine came across and recommended a used pair of Duntech PCL-10's in excellent condition that I ended up buying. I compared them against Wharfedale Diamond 7.2 Anniversaries, and I did like them better – although the Wharfedales sounded really good too, considering that they're a lot cheaper (about 100€, give or take, used).
Amp: I borrowed my friend's Topping TP60 and Chinese Maranz 7 copy tube pre-amp (with tubes swapped for a matched set he got off eBay), and compared that against a basic Onkyo A/V receiver I already owned. I'm sorry to say neither I nor any of the other people I listened with could hear any difference whatsoever between them, either with or without the pre-amp in the signal chain. They all sounded great.
I concluded that if the amp makes any difference (other than power, if it's too weak), it's too small to matter, and went looking for one with the features I want instead. The only tech "threshold" spec I set was output power – the recommendation for the Duntechs is 60 W minimum, so I decided to set a strong preference for that.
I also experimented with a few different placements for the speakers, and it makes an enormous difference. In some configurations, they sound like speakers; in others, they sort of "snap into focus" and instead of hearing music coming from two speakers, I hear music coming from various points in a broad and deep imaginary soundstage. It's as if something shifts about the sound that causes my brain to interpret the signals differently and create that illusion. I couldn't get as dramatic a shift with the Wharfedales.
(My test procedure was pretty sloppy though; I matched levels by ear and switched between them without telling my listeners (including said hi-fi friend) which combination they were listening to. None of them even tried to guess about the amps or CD players; all of them reacted the same way to the speakers (as did I). We all thought the Wharfedales sounded warmer and mellower, but less precise, and the Duntechs were more natural and had a much more vivid stereo image. "I'm not sure which ones I like better, but the second ones [Duntechs] sound more expensive" was one comment.)
I ended up buying a Yamaha A-S300 (found it for 199 euros here
, but unfortunately they only deliver to Finland.)
It's specced at 70 W RMS per channel (120 W peak) for 6 ohms, which is plenty for my speakers, so I didn't see any good reason to pay more for a more powerful version, such as the A-S500. (The same place had had an A-S700 for 299 euros, though, and if they weren't out of stock I probably would've succumbed, just because.)
I was very much attracted to the compact size and small form factor of the type-D amps as well, but couldn't find one that met or exceeded 60 W/channel, was remote controllable, and didn't cost a good deal more, so I went with the more conventional solution in the end.
I also looked at several second-hand amps, but decided not to go with those simply because they might be defective, and I don't know this stuff well enough to be able to tell until it's too late. Also the cheapest ones that met my speakers' recommended spec would've cost as much as the A-S300, so I decided to play it safe and get the new one.
I'm pretty happy with my choice so far. There's more than enough oomph there, it looks relatively civilized, nice aluminum face plate and all, feels relatively well built, with a sturdy chassis and solid connectors and posts. It's also extremely straightforward to operate (which is why I didn't want a multi-channel A/V receiver), and I have no problems at all with the sound. The knobs are a bit disappointing though; they look like metal but are really plastic and feel a little cheap when you fiddle with them. The Topping's metal volume control felt definitely classier. Digital inputs would've been nice too. But for 199 euros I ain't complaining.
I already had a Sony CDP-XB720 CD player from the turn of the millenium. My hi-fi friend also lent me a first-generation PlayStation 1, which apparently has a legendary DAC. I couldn't tell any difference between those two either, nor between the digital out and analog out of the CD player (tried that with my Onkyo A/V receiver). So I didn't see the point of getting an external DAC. I haven't yet tried connecting the A-S300 to my old MacBook Pro that I use as a home server; I intend to use that for playback of my digital music. If there's a problem with its analog audio out, I will of course add a DAC, but I'll do a comparison between that and the CD player first. (I have a sneaking suspicion I won't be able to hear a difference there either.)
As to the cabling, I just bought 2.5 mm speaker wire and some banana plugs for the speakers (had to extract the plastic plugs blocking the posts in the amp for some EU-related reason), and am using some perfectly ordinary RCA interconnect for the CD player. I will swap that to a slightly better-looking one cut to the right length eventually, once I find a nice A/V rack to put them in.
So, short version –
Speakers: Duntech PCL-10, bought used (paid 520 €)
Amp: Yamaha A-S300 (paid 199 €)
CD player: Sony CDP-XB720, already had it (0 €)
Cables: bog-standard (about 15 € for the cable and another 15 € for the plugs)
Edit: I forgot, I also bought speaker stands for them. Paid 99 € for those. I'm sure a couple of cinderblock bricks would've done the job as well, but I have to look at the damn things too so thought that a pair of civilized-looking ones were worth the extra cost.
Total about 750 €, which is about £ 630, a bit more than your budget, largely because of the speakers.
Any advice? Try looking for used speakers. They don't wear out as easily as amps, they've made some really, really good speakers since the 1970's at least so there's a huge range of stuff available, and you can get really good value for money. I bought mine from a local used equipment dealer
rather than privately, because (a) he let me borrow them over the weekend to try them out, (b) he offers a warranty in case something isn't right, and (c) my hi-fi friend vouched for him. I'm sure that cost me a little extra compared to buying from a private seller, but IMO it was worth it.