Here's how great a deal you could get on used gear (if you lived in the States, sorry): I'm selling my Arcam 10 integrated and 7SE player for about 380 pounds FOR BOTH.
Given that this kit was made in the UK, I'm sure you could find a similar deal if you hunted around a bit. The Arcams have been bulletproof and they sound wonderful at both low and high volume. I'm thinking they have to be available all over the place in the UK.
If you could find a deal like I'm selling, you could also get a new pair of Wharfedale 10.1 or something else terrific like that, and still be under your budget. Speakers have made great strides recently.
Used is easy if you stick with the big names (Arcam, Cambridge, etc) that have stood the recent test of time.
I also haven't made the jump to computer audio, it seems there are too many variables for me to understand right now; I'm hoping it gets sorted in the next couple years and then I'll jump in.
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VPI / JMW arm, with Dynavector 20 (also Technics 1200mkII), Luxman 505u integrated, Marantz 8004 SACD/CD, TAD/Pioneer S-2EX speakers, GIK room treatments