Hi.
Being a hopelessly vintage kinda guy, I'd say vinyl + quality turntable and cartiridge + any decent preamp and poweramp + any stone cabs.
That didn't help much I know

, but I haven't found a way to make standard mp3 (or mp4) sound natural in a home environment. Those are great in background situations.
I finally kicked my GF out and was able to set my "better" sound system where I wanted it and the sound from iPod was OK, but lacked the bass and the highs, no matter what EQ settings I used. CDs sound good and vinyls sound great, so it's the data compression and other AD and DD conversion problems that kick in.
WAVs sound quite the same as the CDs. (10 times bigger files though)
As I don't use subs that much I can't recommend any particular ones but as always You get what You pay for (within reason), so any servo amp driven will work if You want it small.
Oddly enough my Altec Lansing home theatre/computer cheapo has quite good overall sound and bass that amazed even a techno fan, he just couldn't believe the amount of noise and bass coming from four small satelites and a box that was smaller than his computer box at that moment.
So the first thing IMO/IME and as several others have stated, is to have better quality media. As well as with the bass rigs, it's hard to create something that's not there in the first place, no matter how good or expensive the system.
Just my 0.02€
Sam