Just recently reached a point of satisfaction with my budget-level system. I have been piecing it together over last two years. I had some lower-quality gear acting as placeholders until recently, which I won't bother to describe. I have an 18' by 24" living room with 8' ceiling, and I can shake the walls as loud as I want to. Most solid bass I ever heard in many years working with modest audio gear. Most important to me, I got this all on a VERY limited budget. I shopped around, took advantage of specials and clearance priced close-outs. Only the center channel speaker was bought used.
I pay $35/month for Dish Network 120 package, which includes 32 music channels.
Element 37" HDLCD tv
SONY STR-DH800 receiver configured for 5.1
Infinity SL-20 bookshelf speakers (front)
Infinity CC1 center speaker
Dual LU43 3-way speakers (back)
2 Sanus speaker stands for rear
SONY SA-W2500 subwoofer
Microsoft Zune 30 w/dock & remote
generic (!) "Harmontek" dvd player
Dish Network Vip211k Satellite tuner
generic "Trutech" dvd recorder (seldom used)
JVC KT-HDP1 HD Radio tuner
I also have a GPX boombox for karaoke disks that can be hooked up via optical or coax. FM radio and OTA tv comes from a vintage VHF/UHF antenna on the roof. Dish Net installed a Model 1000.4 oval last year. I have the TV out line from the sat box running to another room, with Terk remote extenders. So sat tv can be sent to the second room with a 19" LCD.
I have found that if a DVD player has the features I want, audio & video quality is the same between brands. Cheaper brands tend to wear out quicker, but are easily replaced at low prices.
The front speakers are 16 years old, so I tend to leave their cost out of the total price. I never heard anything better in this price range, and with a subwoofer they are better than ever. Front pair are sitting on wall-mounted shelves. I should post photos sometime.
The Zune with remote gives me a 3500 song jukebox always available. I do notice better sound quality playing cd's vs mp3's, but the difference is subtle enough for me to live with. And some of my favorite music I also have on DVD's remixed in Dolby 5.1, even better, but to me a subtle improvement.
I watch HD tv only for local channels and Dish freebies. I like HDTV but am in no hurry to make the jump to Blue-ray.
Friends don't let friends use composite video.