For making music, I used to use those good old computer (stereo) speakers with just bass and treble settings. The music I made those days still sounds great on similar setups, or on 2.1 sets. However, it's very hard to get it to sound good on anything else.
For listening to music, I most often use (closed) headphones. Nothing too expensive, I wear them every day on the bike so I usually have folding headphones. Philips doesn't make them anymore though, so I have to find another brand that sounds good when these break (again).
I currently have a couple of old 80 W speakers hanging on the wall, powered by an old amplifier. However, this setup is completely unsuited for making music. I plan to buy some active monitor speakers later this year to replace all the old stuff.
As for software sound systems, I usually use Alsa if I'm not making music, and turn of everything else, like KDE's artsd. When I'm making music Jack is the obvious choice.