If cheap earbuds do the trick, then stick with them. I used to not be able to tell the difference and life was much simpler and cheaper haha. I can't say that I regret being somewhat of an audiophile, I've learned a lot and love the sound certain equipment can produce. Stay away from places like
Head-Fi.org - Headphone forums and reviews for audiophiles
If you're looking for awesome sound at an inexpensive price, I'll stick with my recommendation of the EPH-100's. Otherwise, just head down to bestbuy, radioshack or walmart and buy whatever you're willing to spend. The earphones that iPod provides are shit, so it shouldn't be hard to find something better.
Also, I'm an idiot, didn't notice you're spending $40 max. Ignore me.