The MP3 audio format has been rapidly gaining a solid reputation in the last several months. Portable products such as <A HREF="http://www.diamondmm.com/">Diamond Multimedia</A>'s Rio have hit the market, and websites (typified by MP3.com) have gained financial success. (See <A HREF="http://www.stereophile.com/news/10358/">related story</A>.) But one area that has so far lagged is MP3-based playback and recording equipment for using the files at home without moving a computer next to the stereo.

Almost every audiophile, whether hobbyist or professional, has taken a stab at building loudspeakers. Combine the fundamentals of cabinetmaking with some basic electronic theory, connect a few good drivers to a well-designed crossover network, and you're on your way to pretty good sound. And now, with widely available resources like crossover design software and high-quality prefabricated cabinets, the task is easier than it's ever been.

Earlier this month, <A HREF="http://www.directv.com">DirecTV</A&gt; announced that it is investing $50 million in <A HREF="http://www.xmradio.com">XM Satellite Radio</A> in an effort to capitalize on direct satellite-to-receiver broadcasting technology, which is intended to provide listeners in the car and at home with up to 100 channels of music, news, and entertainment available in North America. Additional XM investors include General Motors, Clear Channel Communications, and a private investment group.

Now that we've gained a basic understanding of speaker setup, cable dressing and hygiene, and electrical theory, it's time to consider where and how to site your equipment. I've seen all sorts of weird, jerry-rigged shelves and poor component placement, some of the worst in pricey systems whose owners really should have known better. But you can achieve a stunning level of improvement from a haphazardly set-up system---even an entry-level one---when it's rearranged so as to let the components breathe.

Danish audio-video manufacturer <A HREF="http://www.bang-olufsen.com/">Bang & Olufsen</A> has long been known for its unusual product designs. Eschewing the normal tendency of consumer electronics manufacturers to design their circuits and transports into stackable black boxes, the company's current home-audio line includes colorful vertical CD stacks with sliding clear-glass doors and brushed-aluminum cylindrical speakers.

The world's third largest music company has thrown its massive weight behind Internet audio. On June 10, EMI Recorded Music, a division of <A HREF="http://www.emigroup.com/">EMI Group Plc</A>, announced a five-year licensing agreement with Reston, Virginia-based <A HREF="http://www.musicmaker.com/">Musicmaker.com</A&gt;, a major custom CD compilation service and digital download site. EMI has not simply made its enormous catalog available to the service---it has also bought into Musicmaker.com with a 50% equity stake.

Last Thursday, <A HREF="http://www.virgin.com/">Virgin Entertainment Group</A> announced an agreement with <A HREF="http://www.reddotnet.com/">RedDotNet</A&gt;, a Digital on Demand company, that Virgin says will allow its customers to download music and create custom CDs, DVDs, and MiniDiscs in-store. Virgin describes the deal as "a revolutionary development heralding a new wave of music retailing." As part of the agreement, Virgin will become a shareholder in Digital on Demand, RedDotNet's parent company.

Writer Robert Deutsch takes an in-depth look at the <A HREF="http://www.stereophile.com//loudspeakerreviews/118/">Hales Design Group Revelation Three loudspeaker</A> in an attempt to determine whether the product lives up to its name. He also checks into the manufacturer's claim that "what we made will forever change the world of dynamic loudspeakers . . . an instant classic, a benchmark against which others of its type are measured."

Steve Portocarrero passed away Monday, June 7 from Lou Gehrig's Disease, or ALS (Amyotrophic lateral sclerosis), which he was diagnosed with two years ago.