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Recommendations

Recommendations:

SOUND CARDS:
I recommend the SoundBlaster Audigy line of sound cards currently, but M-Audio also makes a great sound card as well. Below are my picks:
SoundBlaster Audigy 2 ZS:  This card makes the most sense for most users. It has great audio quality, great 3D audio for games, and the 3D audio processing doesn't reduce your game frame rates. If you need extra connections (like optical in / out), get the Audigy 2 ZS Platinum or Platinum Pro.  The sound card is the same, but it comes with a breakout box that has additional connections (it needs to be installed in an extra drive bay). Both of these platinum models cost quite a bit more than the regular Audigy 2 ZS.

The nForce chipsets from NVIDIA have high quality audio integrated on the motherboards.  This is the NVIDIA Sound Storm.  One of the good features is 3D audio support in games for 5.1 speaker setups. This is a great choice second to the Audigy cards, but it doesn't cost anything extra if you get a nForce motherboard that has the Sound Storm audio on it (not all do).

The M-Audio Revolution 7.1 is another good sound card with supports for 7.1 speaker systems.  It has good game support too. The main negatives are the lack of an optical connector and your game performance will take a hit because it isn't quite as efficient as the Audigy line (lower frame rates). Both the Audigy and the Revolution support 24 bit 96 kHz recording and 24 bit 192 kHz playback.

SoundBlaster Audigy OEM:  The original Audigy is a a good choice for the user on a budget.

SPEAKERS:
5.1 Speaker Sets:
These are the best speakers to get if you plan on listening to DVD movies on your computer.  They are also good for gaming.  Since this is a relatively new area in speakers, there are few good 5.1 speaker sets. They're also generally more expensive than the 4.1 sets.
My number one pick is the Logitech Z-680 speakers, which can be found for under $300.  They're great speakers, but obviously require a significant investment. 
A close number 2 is Klipsch's ProMedia 5.1.  This set combines the great sound of their 4.1 speaker set (ProMedia v.2-400) with a center channel speaker. These cost a little more, but I don't think they're quite as good as the Logitech speakers.
If you're looking for a very cheap 5.1 system, Logitech's Z-640 set is a good value at around $60 online.

4.1 Speaker Sets:
The Logitech Z-560 was the first decent set of speakers from Logitech, but they go way beyond decent - they're excellent. They're also a pretty good value and can be found on the Net under $140.  They're getting harder to find now though.
The Klipsch ProMedia 4.1 set costs quite a bit more, but isn't quite as good or at best equal to the Logitech set.

2.1 Speaker Sets:
The Klipsch ProMedia 2.1 is the best 2.1 speaker set available, but it costs more than most 4.1 speaker sets. Klipsch makes a set that's a little cheaper and not quite as good, but still a good choice. That is the ProMedia GMX A-2.1.
Altec-Lansing's 221 2.1 set or Logitech's Z-340 set would be good inexpensive choices if price is a concern.

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What To Look For