I'm an old timer newbie who is looking for either a mini system or components. I think I prefer components. Want to play my new Ipod, single CD, and AM/FM in a living room area with limited space (bookshelf). Thought of TEAC CRH-2271CD or Yamaha CRX-330 plus some speakers. Total $ below $500.
You just want Ipod quality sound? Then it doesn't much matter with that budget. Buying anything better than a basic set up that makes sound will probably sound worse if you are sticking with an Ipod.
The purpose of better components is to be more faithful to the incoming signal. When that signal is average Ipod quality, compressed and Mpeg'd, then better quality gear will simply make it more obvious what is missing from the Ipod sound.
The Ipod actually makes a fairly decent source if you record at high bit rates but that severly limits your library. You'll have to decide which is more important to you, quality or quantity. If you choose quantity, then buy any decent Ipod docking system. If you choose quality, then your budget is somewhat shy of a good system of new components.
You could by used gear but that's always a gamble and not advised by me when you don't know what you have to choose from and which pieces give the best overall performance. We can't guess at what you'll like so making recommendations is difficult in this situation. If you're not that picky about the quality, then you should just stick with the Ipod docking system.
Jump your budget up to about $750 and you'll be in the ballpark for a good budget system that can grow and give you pleasure from multiple sources. Find a good independent dealer in your area - one that carries NAD or Rotel - and go listen to what they have to offer.
Record a few selections on your Ipod at low bit rate and at high bit rate and make your comparisons using your Ipod as a source.