#1
The other day I was at a buddy's house and I noticed he had a nice guitar setup through his computer speakers. When I asked him about it, he said he used a preamp to get quality sound out of his computer speakers. The distortion sounded great and he had a lot of different options for distortion and other effects.

I have a decent amp, but I've often wanted something small so that I could play straight through my computer -- it would be perfect in my dorm, and less hassle around the house. His preamp was small, about the size of a guitar tuner.

I'm just wondering if anyone has any advice on this? I'm definitely not knowledgeable about preamps, maybe someone has a recommendation on what might be a good one to get? I tried looking through Musician's Friend, but I'm not sure exactly what I would be looking for in one. I doubt I would use it for anything more than playing through my computer. My friend said his sold for about $250, and that'd basically be my upper limit.
#3
Well, technically a "preamp" is pretty much anything you can plug your guitar into. (/very basic definition)

For your practical purposes (and budget) I would look at the Line 6 Toneport. It comes with amp modeling software (which is what your friend was most likely using).

A $250 "guitar preamp" through computer speakers is just not going to get decent tone, let alone distortion.

If you are truly looking to build a nice amp out of stand-alone rack units (which is what most people assume when you mention preamp), I would look at brands like Mesa, Marshall, VHT, and Engl.
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#4
I'm pretty confident he wasn't actually using software with it, since he was changing the settings from the small box itself, not through the computer. He may have simply plugged the computer speakers into the box, rather than setting it up through the computer, I'm not really sure since I didn't think much of it at the time.

I guess basically I'm looking for any way that I could jam without really needing my amp, while still getting a quality metal distortion and other effects, whether through a computer or straight through to the speakers or whatever.