As far as CD vs MP3 - standard CDDA audio - like off a CD you'd buy at a store, is stored at ~1410 kpbs, most MP3s are 128 kbps, or 256 kbs. Even if you're playing both from a CD itself, an uncompressed CD will always sound better than MP3 - even though MP3 encoding is highly effective, it will never sound as good as a standard CD, ever. Most people though - won't notice a big difference. CD's are played from what's essentially CDDA format, not MP3 - standard CDs will sound better. An MP3 on a CD is still encoded at it's original encode rate, regardless of the media it's stored on.
Hmm, that gets a lot tougher. You can probably find a nice head unit for the car for around 100, plus ~15 for wiring and install kit. I recommend just doing the install yourself - on MOST cars installing a new head unit is a lot easier than people think. Last Toyota I worked on it was pretty easy, but do some quick research and find out - you could save $50 on install or whatever it is by just spending a couple of hours of your own time, and learning a thing or two. It's really well worth trying out. Usually all you need is a screwdriver, some wirestrippers, and electrical tape - on a lot of installs you won't even need the wire strippers / elec. tape.
Given the price point you're looking at, for head units, I'd REALLY go ahead and spend the extra $30 and get this - and do the install yourself to make up for the price:
http://www.bestbuy.com/site/Kenwood...Deck/9760624.p?id=1218168618626&skuId=9760624
Now feel free to disagree, it's your money - and we're all on budgets so do what you're comfortable with.
On the lower price range, honestly any of the $99.99 JVC, Kenwood, or Alpine decks on Best Buy.com will serve you pretty darn well for what you want - and they'll even hold up pretty well if you want to expand your horizons later:
http://www.bestbuy.com/site/olstemp...id&list=y&iht=n&st=processingtime:>1900-01-01
That slickdeals on those speakers would probably have been pretty darn good for you - provided they fit your car's stock speaker holes (edit: they did). I'd go ahead and have the speakers themselves installed - just for the sake of sanity.
Looks like all your speakers are the 6 1/2" size, which is actually a nice size to be working with.
In your price range I might consider:
http://www.bestbuy.com/site/Pioneer...air)/9454752.p?id=1218109605642&skuId=9454752
You'll need two pairs of course. Unless your RAV4 has the 6-speaker set up, in which I'd really have to see it to figure out if you can just bypass 2 of the old speakers, or if there is a factory 'amp' etc. I'm not a huge fan of the speakers above, but for the price, they aren't bad. Here's the $50-100 page for Best Buy. I'd really consider looking for a nice 2-way set at the $99 mark, but again I understand having a budget. On the lowest end, the Kenwood and the Clairons will be comparable to each other at $50 a pair - which you prefer will likely be based on personal preference.
http://www.bestbuy.com/site/olstemp...=15&sc=carSP&sp=+brand+skuid&usc=abcat0300000
A lot of times you can find last year's model on clearance if you look around - generally, there's not much improvement year to year - so don't feel bad about getting last year's speaker model, it's usually a much better deal.
In general, I'd suggest spending on the top end of your budget:
$130 head unit, $99 x 2 speakers, $15 wire/install kit for head unit, $100? install for speakers - I know that's more than you were looking for but leaves a lot of expandability, and you'll be really pleased with it.
On the lower end of your budget:
$99 head unit, $15 install kit, $50 x 2 speakers, $100 speaker install. That'd be $315. You might be able to find another deal like that slick deals which would help greatly. I'm pretty wary of that $50 speaker mark though, unless you find a deal - standard $50 speakers are really rather meh, and not a significant improvement over stock to most peoples ears. They WILL be a huge improvement, but for the money spent, you won't likely realize.
If you're really looking to save money, speaker installs aren't hard, especially when you're keeping stock wiring and stock speaker size - just time consuming.
Unfortunately, car audio gets expensive quick, even on the low-end.
Don't feel like you need to do it all at once either. The best car audio systems (even low end systems) are 'living' systems, that you upgrade slowly over time and have time to evaluate each step. You don't get the huge 'wow that sounds sooo much better' by doing this, but that's just a psychological thing - it will sound better, period.
A new head unit will improve your over-all quality a lot more than people think, and a lot more than pros like to admit - because they relieved cleaner power, and crisper sound, with far less noise. You're also more likely to blow stock speakers with them, but it would be a nice improvement while you get together more money. I think if you skimp in the short run you'll be disappointed in the long run. I say get a head unit, enjoy it for awhile, then decide if you want to add on new speakers while you save up for them, as they'll be the more costly part.
A decent set of 2-way speakers will have far less bass than people usually like, but will put you in a nice position if ever want to expand. I really recommend against 3-way speakers, as they're just not great at anything, and have a fake bouncy bass that people usually blow speakers with trying to get more out of them then they were designed for. Heck even with one of those 'boom-tube' things, and a set of nice 2-way speakers, I bet you'd be shocked at how much of an improvement it is. Systems can be an investment, I've taken my 'living' system with me through 3 cars now, and while over time A LOT of it has been replaced, it's been nice to always have a decent system when I got into a 'new' car.
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