Originally Posted by chowdog
$400 now....might be able to add a lil more later but not much.
Polk Audio Monitor40 Series II $100
Polk Audio CS1 Series II Center Channel $60 and a polk sub puts me at $360
I add the used Denon and im over by 60...I dunno
Sorry to say, but $400 simply isn't enough, even for an inexpensive HT setup. The AVR alone will cost you around $300 on the low end unless you go ultra-cheap, which I do not suggest with your AVR. You want your AVR to produce enough power for 5 speakers. What if in the near future, you want to upgrade to 7.1. If you buy an ultra-cheap AVR now, you'll have to upgrade if you want to add speakers, or risk being starved of power.
Also, for a halfway decent sub, you are going to have to drop $200 on just that.
So for 5 speakers you are going to need at least $300. For the sub, at least $200 and for the AVR at least $300. So I think the cheapest you can go is $800. This is ballpark and not exact. If you find some really good deals, go used or refurb etc, you might be able to drop $100 to $200 from the total, but don't hold your breath.
Thus far, I have spent $600 on my HT sound setup and I don't even have the sub yet. I plan on buying a BIC PL-200, so that's going to be another $300. And my setup is super cheap (Sony speakers) except for the AVR (Middle of the line DENON) so don't expect to be able to spend much less than I did.
I would skip the MLt-2 system. The sub included is only 10" and only goes down to 32hz (according to the specs. This will vary depending on room acoustics). Such a system will probably sound just fine for Home Theater use, but I would go for a better subwoofer. What you could do is buy the MLt-2 now, then upgrade the subwoofer later if you feel it is not sufficient. For inexpensive, stand-alone subwoofers, the BIC F-12 is probably the most popular, followed by the Polk SW505 then the Klipsch 12HG. I plan to get this one http://www.amazon.com/BIC-PL-200-Acoustech-Platinum-Subwoofer/dp/B001W3FXAQ/ref=sr_1_1?s=aht&ie=UTF8&qid=1353607679&sr=1-1&keywords=BIC+PL-200