AVS Forum Special Member
Join Date: Dec 2007
Location: Southern California
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With such a low budget, 7 speakers is impossible.
The quality would be so low that it will sound like crap.
Even getting 5 decent speakers will be a challenge.
On the other hand, the Pioneer BS-22 speakers are only about $140 per pair, and that will be the perfect answer to your problem. They are amazingly good for their price. IMO nothing else in that price range even comes close to their sound quality (check out the recent Stereophile review on them).
Get four of those and the matching Pioneer SP-C22 center speaker and you will have a good-sounding setup for around $400.
You will also need a subwoofer, of course.
The Polk PSW505 is usually around $200, and is about the only halfway decent one in your budget range. look around for the best deal on that one.