Right now I am using el cheepo $20 headphones.  They actually sound great to me, but I know better.  I came across an old vintage Koss K/2+2 set for $30 on Craig's List. http://nh.craigslist.org/atq/4470934948.html 
 
This music production stuff is  only a hobby to me and my only hesitation is not the price for the set but the 30 miles or so drive to pick them up.  The ear-pads have lost the liquid but I am told foam filled pads for the set can be purchased for 6 - 8 bucks.  Is it worth the drive to buy them or should I keep shopping? 

Shop for a pair of monitors

I would keep shopping. You never know how much those have been abused over the years. Plus, when you add up the phones, the earpads, and the money you'll spend in gas, you're looking at $50-$60. You could get a brand new set of Audio-Technica ATH M-40's shipped right to your door for less than that. There are other manufacturers that also have headphones in that price range. I think you'd be better off going that route.

The ATH-M30x model is very good as well. In the range of $70 I'm thinking about getting a set for the gym. I have ATH-M50's at home and I love the sound.