Updating My Home Sound System

I had originally wanted to update my sound setup a couple years ago but abandoned the project when other things came up that needed my money but I'd like to revisit it again.

I have a DLP television. I have a HD DVD player hooked up to it via HDMI and I have a PS3 hooked up to the television by HDMI as well.

I have a Technics SA-AX530 AV Stereo receiver. I also have two bookshelf BOSE 201 Series IV speakers.I hooked it all up and followed the instructions in both manuals on how to set things up if the receiver doesn't decode Dolby Digital or DTS. I pop in a movie and the sound is better than listening just to the television speakers until people start talking and then the background sounds drown out the actors speaking.

How would you improve this setup? Would you use any of my existing equipment or am I better served dumping it all and starting over? I don't necessarily need a full 5.1 setup, would be nice but not sure how I would work it out with my current room layout other than having wireless rears. That being said if I am better served with a smaller set up 3.1 or even 3.0 (since I am in a condo not sure if a sub is really useful for me right now), I would definitely look at that.

Funds are still a bit limited but I don't mind buying things little at a time. I am still working on the budget. I am in no way an audiophile so I am not looking to buy high end.

What can I do to make improvements?

thanks for the reply.

I looked around in the manual but couldn't find the hdmi version. It's a toshiba dlp from 2005.

I do have an hd DVD player but I also have a ps3 for streaming and blu ray. Eventually I would like to get a standalone player and a new tv but what I have fits the bill for now.

Local store has an open box Klipsch HDT 500 speaker system for 150. Is that a good value?