I believe the difference is mainly if you are mixing the drinks or not. For example, the Gordon's Gin mentioned above is probably perfectly okay in a Singapore Sling; you WILL notice a difference between a Gordon's martini and a Sapphire martini, though.
I'm not one to be terribly insistent on "top shelf" liquor. I've had my share of Balvenie Doublewood, and it's mighty fine--to be honest, though, a lesser single malt suits the bill just fine. 15 bucks a fifth seems to be the price point I'm most comfortable with generally; going lower than that, things start to get sketchy. That's for straight liquor--if it's being mixed, I'll go a little lower.
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