Ive been playing guitar for 20 years now, and modding for about half of that time. IMHO the biggest difference in tone (I'm a tone whore so trust me I found these things out the hard way) is HARDWARE. I've noticed the weight of the guitar, the neck mount (set or bolt on) and how the strings are attached; String through, Floating bridge, Floyd, or W/E, are the biggest play the biggest part in shaping sound as well - that is, beyond hardware. The Nut material and type can play a factor into how a guitar sounds and feels.
I noticed a big difference in clarity and bite when I went from the cheap plastic nut and stock saddles of my 50's strat to the LSR Roller nut and graph tech saddles...... AND I haven't broke a string on that guitar since I had those mods done (a year ago)........
Same with my Epi. I put a roller nut and graph tech saddles and it made the tone awesome.
Thats my .02 on the subject(s).
My thing is :
Its only a cheap guitar until you stick 300 dollars in parts into it. I refuse to pay more than 400 dollars for slabs of wood that I can shape/tune to play like a 2000 dollar slab of plants/bone/whatever "booo-teek" materials you can think of.
Guitars: Epiphone Special 2 LP modded with a SD Pearly Gates and a SD Alnico 2 flat strat pro.300K pots.Tone pros Brass Stop tailpiece.Dunlop frets dressed to .031,LSR roller nut, Spezel custom stainless steel locking tuners. Satin finished neck.Fender MIM 50's strat modded with LSR roller nut, graph tech string tree,sperzel satin chrome locking tuners, graph tech saddles,300K push pull volume for "neck on pup" and 200K tone pots.PUPS:Neck seymore duncan QP single coil for strat. Middle: Seymour Duncan JB Jr with coil tap (so actually a 9 way tone selection). Bridge: Same as neck.Amps/Cabs.2 Epi Valve Jr's, Peavey Delta Blues 1x15. Randall RG200es,Guitar research 4x8 cab loaded W/celestion super 8's and rewired for two-2x8 operation.Marshall 4x12 slant lead cab,Johnson cab 1x12.