I started on a decent midrange bike in 99 (Cannondale CAAD 3 frame with 60mm Headshok), and immediately replaced most the stock components because even then I could recognise that they were rubbish. So in 99 I had an XT/carbon equiped bike with on a decent frame, not "high end" but probably a bit above "midrange." The drivetrain componentry changes made a big difference, but the rest was mainly bling.

The initial investment was worthwhile- I've not had any really compelling reason to upgrade the basic bike since (though I will be buying a full suspension bike later this year). Had I started with a lower end frame or slowly upgraded components, I would have spent more money and not enjoyed biking as much.