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To understand why audiophiles talk about Grado headphones the way oenophiles speak of 2000 Bordeaux, consider the Reference Series RS-1. These handcrafted mahogany headphones from the 50-year-old Brooklyn company use a vented diaphragm with wooden air chambers that virtually eliminate distortion and deliver a clear, rich tone across a full 20-kHz bandwidth. Hook a pair of RS-1s up to an iPod and you'll think you're in Carnegie Hall. $700.