Actually the onkyo 509 is the competitor to the 1612. It is the lowest model to include Audyssey processing. Their specs are pretty even. The onkyo 609 is on par with the Denon 1912.
Ignore the previous post. HT is not cheap, but it's all relative. You can build a HT system for around $500 you may be happy with it. The key there is YOU. Commsysman needs to understand not everyone has his budget and standards.
That onkyo 509 is $239 new. You can find refurbs or used cheaper if you so desire.
For starters, how big is this room and is the primary purpose music or movies?
Do you want floorstanders or bookshelves?
You could pair the Jamo S606 package from Vanns for $399 and add a sub later. Those towers have 8 inch woofers so you could make due for awhile. That's $140 over budget, but an idea.
There are lots of great sounding bookshelves for $200-$300 a pair. You could go with that receiver and a 2.0 setup such as Hsu HB-1s, Energy RC10s, Cambridge audio S20s, NHT superzeros, etc. add the rest as you get funding.
It's a great hobby. Enjoy it. Research it. Have fun with it. Don't think that you have to spend a fortune to get good sound. There are lots of bang for the buck options. Granted, the more you pay, the better the quality, but that is true of just about everything.