Er, I am tremendously unqualified to even begin to answer your post... except for one part. (And I'm sure someone will probably disagree.)

I am on the verge of getting into the hobby, having only purchased a solid receiver (Pioneer Elite VSX-72TXV that I got at a steal), which I haven't hooked up... because I have nothing good to hook it up to! I will (hopefully) be purchasing a 5.1 setup of Axioms shortly... which is why I troll the boards.

I am answering you because, as I don't have any good equipment yet, I spend inordinately stupid amounts of time reading, planning, scheming... and figuring out "what" I will be buying.

SO... the only thing I think I can say for sure is that I have read a TON of articles (including articles from this site) that indicate most "high end" speaker cables are poor investments with negligible discernable effects on sound. (The phrase "snake oil salesman" is used regularly to describe the purveyors of said cables.) So long as your speaker cable is "good" (i.e., a nice 12 guage... 10 guage for long runs), my understanding is that you essentially will not hear a difference.

Perhaps when you're at the point that there isn't "anything" else to buy... (like it sounds your friend is), using such dramatically insane equipment, probably using expensive diagnostic equipment to measure it, etc., then you need to upgrade your cables. Honestly, though, I'd really think at that point the only way to tell a difference may be by using the equipment... "the diagnostic tests tell me it sounds better."

I suspect people "in the know" would say if you're going for great, two channel sound... the first place to look might be for a great full range tower speaker. (Though I'd almost think the M22s plus a good SVS sub would be hard to beat without spending "a lot"... i.e., I don't think spending $900-1000 for a set of M60s or B&W DM603s, etc., etc will blow you away like they would if you hadn't purchased the sub.) However, my guess is that "in the know" people will say that eventually... once you're willing to spend $2000+ (?), upgrading to great floorstanders is the way to go.

The next step for you would probably be better amplification? That would seem logical. If you're really into two channel, buy a good separate two channel amp.

After that... a decent power conditioner, better rated "source equipment"... meaning get a "better" CD player?

Also, one of the consistent themes that everyone says is critical is not equipment, but positioning/placement/acoustics. Your friend obviously has the means to address that. A dedicated room with acoustic treatments, etc. is probably pretty important... once you've spent $2500 on a pair of tower speakers, $2000 on amplification, and another $1000 on whatever, you probably can't go too far if you are limited by your room.

Anyway, there's the opinion of a guy who owns nothing but has read far too much.