My jukebox system has a Soundblaster MP3+ external USB soundcard tying the PC into a Sony home theater amplifier connected to full-size floor-model Accusound speakers. The overall sound is excellent.
As far as software goes, the Creative soundcard (though it's not really a "card" since it's an external box) comes with a variety of audio enhancement programs including an equalizer, EAX effects, etc. As well as these add-ons, I use the DFX plug-in for the WinAmp MP3 software.
MP3s are, by their very nature, a "lossy" medium compared to retail compact discs. Although I try to rip all my music using the latest LAME algorithm software, there is still an overall loss of quality which definitely is audible to the human ear.
The DFX plug-in, as well as the other audio enhancement software I use, attempts to overcome this loss of quality that MP3s possess, and it does an excellent job of doing so.
Say what you will, but there's no doubt (to my ears) that running these software program definitely improves the sound quality of my song files. Even with my hardware set-up, the difference is dramatic.