Monitor speakers are designed to provide a flat frequency response so that the audio signal is reproduced faithfully, within the budgetary constraints of the speaker. The monitor design focus is to avoid artificially boosting bass, treble or other frequencies in an attempt to make the speaker sound 'good' and to avoid resonances from the speaker and cabinet. As the producer you need to hear accurately what you are mixing, without the speaker adding its own color to the sound. This can cause mixing errors as you correct speaker errors along with the mix errors. For a more thorough discussion see the Wikipedia article on Monitors here.
FL Studio setup using Event Opal studio monitors and B&W Hi-Fi speakers for monitoring
For home and project studio enthusiasts monitors are generally 'bookshelf' sized and sit relatively close to the user (near-field monitor) so as to minimize the influence of the sound from the room and a more direct sound from the speaker is heard.
Adam, Alesis, Dynaudio, Behringer, Event, Focal, Fostex, Genelec, JBL, KRK, Kurzweil, M-Audio, Mackie, Tannoy, Tascam & Yamaha.
Generally monitor speakers include in-built amplification and are so known as 'active monitors'. These will usually connect directly to your soundcard (with the correct adapter) or audio interface. Alternatively, 'passive' speakers that require external amplification.
Making a monitor speaker requires precision manufacturing, quality materials and considerable research & development effort. You can expect that the more you pay the better the monitor will be, TO A LIMIT. Based on reviews and customer experiences, here's what the following budgets will get you (when buying in the brand range above):
Prices are in USD.
NOTE:There is a lot of marketing fluff surrounding monitor speakers and their performance. Cheap monitor speakers will likely suffer the same flaws as cheap hi-fi speakers. A well designed, engineered and manufactured speaker is a precision instrument that will require some reasonable investment.
Form an equilateral triangle between the speakers and your head with the high-frequency drivers (tweeters) at approximately ear height, directly facing you. Notice how the speakers are angled toward the listening position in the image above. This is important as high frequencies are directional and you won't hear their true level otherwise.
Also, make sure the speakers are not pushed hard-up against any wall. The gap between the speaker and the wall should be not less than a 5 cm (2"). The front panel of the speaker should not be placed more than 1 meter (39") from the wall. This placement will minimize low frequency phase cancellations as bass frequencies bounce off the rear wall and mix with the direct speaker output at the listening position.
The sound of the room will also have a big impact on what you hear. Generally it's a great idea to add sound absorbing material on your walls and possibly ceiling to absorb sound to reduce internal slap-echo, general reverberation and standing waves. You don't need to cover every surface 100%, just enough to control the sound. The purpose is to better reveal the direct sound coming from your speakers so it's not masked by room noise. It also helps to flatten the frequency response. Standing waves (resonances) in the room can cause big peaks and dips in the frequency response (+/- 18 dB easily). Notice how dramatically bass seems to change as you move about a room with a pair of speakers playing in it. See this video for an inexpensive solution to acoustic treatment.
Another level of control you may consider is 'room correction'. This can be useful to finesse the frequency response flater after the major room issues have been sorted with acoustic treatment. For example, the Event Opals (shown above) are used with the StudioEQ room correction software in this video.
Many examples: This Flickr slideshow has wide range of FL Studio customers' studio setups. Rooms range from basic to advanced, but it will give you some idea what a typical home/project studio looks like today. Note the lack of acoustic treatment, it's something most people overlook.
Yes you can. The much lauded Yamaha NS10 monitor speakers that carried mixes forward for over 20 years, and still being used today, were Hi-Fi speakers rebadged for the studio. Generally Hi-Fi speakers from reputable manufacturers (B&W, Dynaudio, Polk, Wharfedale, Yamaha etc), follow a similar price-performance relationship as do monitor speakers (see above). If the NS10's were on sale today as 'Hi-Fi speakers' they would probably be in the $200 bracket.
However, as the price/performance equation is similar for 'Monitor' and 'Hi-Fi' speakers, and unless you already own a set of quality Hi-Fi speakers, purchase monitor speakers. Why? Otherwise will waste all your time arguing with self proclaimed music production 'experts' that your Hi-Fi speakers are as good or better than monitors, which they may well be. But you will never convince the 'experts' and that gets boring after a while. You have better things to do, like make music :)
For your reference here's some pictures of Hi-Fi speakers used at Abby Road studios, a real proper professional studio even!
Yes you can, with practice. We have heard many excellent mixes made with a cheap pair of PC speakers and a good set of headphones. Headphones are like magnifying glasses for your sound. They allow you to hear things simply not audible with most monitor speakers. Headphones are certainly a great place to start if you are not sure how far you are going to take this music production malarkey.
Two excellent and reasonably priced headphones consistently praised in our forums are the Audio Technica ATH-M50 and Sennheiser HD280 Pro.