Hi MDS,
I read the 'Introduction to Digital Audio' book. The book doen't offer much analysis of the explanations, so you could read it and leave without any idea how much you need to spend on equipment. I suppose such a book that did offer such information would be titled something like 'Practical Digital Audio'. Out of interest, seeing as this is such a regular sort of question, do you know of any links to sites that do proper physical tests comparing cables? This, to me, would offer a more rigorous coverage of the topic, rather than just going on the accepted principle of using short lengths of cable.
It's rather interesting with Bob Katz. I've seen his site, Digital Domain, and he seems to offer seemingly contradictory advice. For example, on an article about jitter, he initially seems to dismiss the importance of jitter, but then goes on to say how jitter can introduce (subjective) distortion on playback. Again, I think that his site, though interesting, doesn't really offer much practical advice. One of his conclusions is to buy a DAC that has high jitter reduction. I've never seen this sort of performance information on any CD player or digital receiver.