A couple οf qυеѕtіοnѕ:
1. Whу υѕе a higher οr lower gauge speaker wire? Whаt ԁοеѕ іt ԁο fοr mе?
2. Whаt ԁοеѕ better insulation ԁο fοr a speaker wire?
Basically, I’m wondering whу I ѕhουƖԁ bυу more expensive speaker wire (Ɩіkе Monster cable) instead οf thе cheap stuff (Ɩіkе аt WalMart) fοr mу stereo system.

The smaller the gauge, the stronger the wire and the better the conductivity. For example an 8 gauge wire is better than a 14. As far as sound goes, if you are using an amplifier (or EQ) then the lower gauge wire will condcut better than the higher gauge. Howver, if you are hooking up a system with less than 30 watts of power, any of the speaker wire will work.
NO.
wire size depends on the amount of power that will travel through it. and insulation merely seperates the wire from everything else, preventing shorts. Stock harnesses typically use 18-16 guage wire, which is never enough for a aftermarket system. the first to replace should be the constant 12v( usually yellow), I replace it with an 8 guage wire directly from the battery, and always have a fuse within the first 12″ from the battery, then the same size for a ground, never longer than 18″. This prevents “dimming” of the headunit lights, which is basically when the unit is starved for power. If using the speaker outputs from the headunit, speaker wires can be changed to a 12 or 14 guage wire if you wish, but stock size will work. For amp power, I never use anything smaller than 4 guage.( usually when you see someones headlights dim while bumping is due to improper wire size, i.e. too small) Even on low power setups, like under 200 watts, i use 4 guage. If you plan on having some rediculously large amp that puts out over a 1000 watts, go with 0 guage. Ground wire always needs to be the same size or larger and never longer than 18″. And i always use 8 guage wire for my sub speaker wire, from amp to box and inside the box as well. I also use 12 guage for my front/rear speakers
Wire size does differ by brand. You can go buy Monster cable and get a true size, or go get a cheap brand, get charged the same price but actually get a smaller guage. the outside dimension is the same but the cheaper wire has a thicker insulation and less core!
logan is very correct. That other guy is totally wrong.
If your headlights do start to dim, invest some money into a capacitor.
Think of a garden hose vs. a fire hose. The bigger the hose, the more pressure (amperes) you can push.
think of the wire like a water hose, the bigger the hose, the more water will flow through.
if you have a big water supply and a small hose, what happens? if you have a big hose it does not matter how much water you have going through, your OK.