I am seeking the best sound quality out of my system without spending a great deal of money on bulky equipment. As a result, I am wondering if I should stick with my Aiwa LCX-70M stereo system, and simply install plug-ins to improve sound quality, such as those from Dolby Laboratories or DTS? If not, what would you recommend to replace it, and at what cost?
I am not sure what you mean by installing plug-ins, but if you're looking to improve on your Aiwa system, you can go in a few different directions. To retain all of the connectivity that your Aiwa system provides, you would probably want to buy a newer all-in-one stereo system from a big-box store like Best Buy. Take a listen to what they have and go with what you think sounds the best.
If you do not necessarily need a CD player or tuner, however, you can spend $300 or $400 on a pair of powered speakers (speakers with amplifiers and multiple analog inputs built-in) that will assuredly sound better than anything you would be looking to purchase from a place like Best Buy. Audioengine's A5+, which I reviewed earlier this year, would be an excellent place to start your search. You could also check out NHT's SuperPower, PSB's Alpha PS1, or M-Audio's AV 40. . . . Hans Wetzel