[turkey]

I firmly believe that if one were to go out to a good hi-fi shop one could walk away with a fantastic setup for under $1000 consisting of a receiver, CD player and some high quality mini-monitor speakers. (Heck, the awesome PSB Alpha B1 speakers go for just $199 a pair!)

I would agree with this. I also think that many people would be happier if they could stop at this point, rather than chasing the elusive "perfect" system.

I also kind of think that "Cheap and Cheerful" pretty much starts and ends with a receiver and CD player. You're not going to get better performance than this on the cheap. (And you might not get better performance even if you spend a whole lot more.)

Ok, so that's solved. Now let's talk about Cheap and Cheerful speakers.

[macrojack]

If you view cheap contextually, then my <$4K horn speaker system qualifies. Alternatively, $200 for a used boombox is horribly expensive.

[baldrick]

In that vein:

The $199 PSB Alpha B1s are a colossal bargain.  Cheap & cheerful for sure.The $399 PSB Alpha T1s are also a colossal bargain.

Some may say that the $699 Totem Mite mini monitors are cheap and cheerful (and they are) but hard to justify after hearing the Alpha T1 for $400 less.
By comparison the $119 Bose Companion 2 are definitely NOT a bargain.