You can make good stereos sound great and great stereos sound cheap. It is all in the speaker placement.
Over the last 15 years speakers have been put on a diet that would make Dr. Atkins proud. The once proud behemoths of the living room have shrunk to the size of tennis balls. While the new sizes are often esthetically more pleasing, they lose the automatic advantage of proper speaker height. Speakers perform best when they are properly aligned to your listening position and adjusted for the room. John Atkins of Stereophile Magazine just released a very nice primer on speaker placement. Atkins mentions a special CD to help you adjust the sound but he also gives general placement strategies that will work for everybody.
One aspect he does not emphasize enough is speaker height. If you pull the grill off your speakers you will usually see two or more drivers or individual speakers mounted to the box. The smallest one is the tweeter, a speaker designed to do high frequencies. The brain uses high frequencies for cues on location. If the speakers are properly placed and you have a good recording, the musicians will audibly float between the speakers. The proper height for tweeters is the same height as your ear when you are sitting down to listen. If you put them too low, high or aimed away from you, clarity drops. This is why speakers mounted in the ceiling that fire straight down, sound muddy across the room.
Atkins also goes on about triangular placement and room acoustics. It is a quick introduction to a topic that has generated thesis papers, but if you just follow the basics about height, placement and alignment, your audio may take on a new life.