If you're looking to enhance your music platform without breaking the design budget, you might want to take a look at Freescale Semiconductor's DH1 reference design. Built around the company's 56371 Symphony DSP, the reference design results in a cost-effective Dolby surround-sound platform.
Along with my knowledgeable beta tester, we put the DH1 through the paces. We experimented with a set of high-quality headphones, then with a set of inexpensive headphones.
I guess it shouldn't come as a surprise that the DH1 had a bigger impact of the cheap headphones. The reason is that there's more room for an improved signal (and better sound). We went through various scenarios, including an HD audio signal from broadcast TV, and DVDs with different types of sound. We also switched back forth from analog to digital sound.
Considering it would probably carry a price tag around $99 (including headphones), my tester gave it a thumbs up. And thanks to this reference design, you should be able to get to market fairly quickly, even if you're embedded the platform into something like a handset.