Can anyone recommend a setup (sep. hi-fi amp/ext. sound card) for multi-speaker sound system for 192kbps mp3s?

Question

I'm looking for the best setup for playing ~192kbps mp3 quality music from my pc into a rich, multi-speaker setup in my room.
I currently output from a Soundblaster Live! card over 7m phono cable to a 10 yr-old, but fairly decent all-in-one hifi with 2 speakers.
I do not want to play games, watch dvds or anything fancy with this setup & the main aim is to get good quality MUSIC (or as much as you can from 192kbps mp3s) - but ideally through 4 or more speakers dotted around the room to give a rich sound from wherever I stand & wrap around me.

1. Does anyone know of good technology that gets the most out of this lossy audio format?

2. Does anyone know of a great way to create a subtle, non-music-ruining surround-sound/similar effect to work with mp3s (recorded in stereo) or is it not worth bothering?

3. What would people recommend doing? Using an all-in-one soundblaster x-fi card or similar, or having an average sound card output to an hi-fi amp?

4. Speakers?

Budget: £300 - £1000.

I am aware that I'm never going to get fantastic quality from an mp3 but given the amount of music I have in this format now, I would like to know how to create the best sound from this format and how much I should spend before the equipment is too good for the incoming quality.. I know that you can't polish a turd. :)
Are there things out there to improve ono mp3 quality specifically? Like the soundblaster XFi but more of an audiophile's external sound card/standalone amp with PC interface?

Answer 1

I'm sorry, but you will never get good quality sound from mp3's.

The very nature of mp3 (compressed audio format) means that large chunks of the audible frequency have been cut out, in order to reduce the file size. Nothing you can do will replace that missing sound - it will always be thin and tinny.

The mp3 compression system wasn't developed for sound quality, it was developed for storage quantity. Hence the actual music quality is lousy - sorry, but that is the truth.

You need CD, SACD, DVD-A or vinyl for rich, all enveloping sound.