Rancilio Silvia & Rocky combo
You'll think you've died and gone to espresso and cappuccino heaven.
Krups machines suck, as do blade type grinders. My first set-up was a Krups and blade grinder and it was horrible, couldn't make espresso for shit. No crema, no consistency, just crap burnt or underextracted 'coffee.'
The next setup was a Gaggia, and it held up great and was $200 for the machin and $100 for a burr grinder. It made pretty good espresso, steamed well enough for frothed beverages, and the grinder was pretty consistent.
My current setup is the Rancilio combo. Worth every freakin penny. I've had it for 2yrs and it still belts out perfect grinds, adjustable for all the different beans I've tried, and shots that make Starbucks taste like 5 month old gas station coffee. The steamer makes perfect microfoam, perfect for latte art or just super-smooth sippin cappucinos.
If you want a decent, reasonably priced machine, stick with Gaggia, Saeco or Rancilio.