I recon the space will not be very large since it's an apartment. You should focus on the speakers since that's what's going to determine the sound. Then you might think about tackling first reflection points with absorption panels on the ceiling and sidewalls. I am all for a nice big screen and Samsung provides very good bang for the buck, so that gets my vote.
Speakers? Please do not mix in-walls with on-walls for LCR! For that budget, I'd avoid in-walls all together since you will always find a better normal speaker for a given price. On-wall? Sure, why not. But try to use identical speakers for LCR. Jamo has two lines of on-wall surround sets and both get very good reviews. The D500 which is THX Select 2 (for modest sized rooms) and the larger D600 which is THX Ultra 2 approved (for larger rooms). Both systems use identical speakers for LCR. The D500 LCR is only 10 inches height, so that should fit below the screen. Set the L+R both at a 22.5 to 30° off axis angle and not more than a foot higher than the center speaker. If you also get the matching surrounds, you will pay about $1,650 or less:
Alternatively, you could look for powered professional speakers. The Mackie 624mk2 is a perfect tool as many sound engineers will testify. Active speakers are simply superior over passive speakers, especially with the built-in active crossover and twin amps. They are suitable for wall-mounting.
Emotiva Pro also has great powered speakers with fantastic sounding folded ribbon tweeters. I'd recommend the Stealth 6 (now on sale for $499). It's more powerfull than the Mackies but doesn't have a waveguide, hence off-axis response isn't as good. So if it's more than you listening, I'd go for the Mackie 624. Also, the Emotiva stealth 6 doesn't connect with RCA, so a special interconnect is needed unless the other device has XLR. Or get the cheaper airmotiv 6 which have RCA. They come in pairs, which is inconvenient if you only need 5.
You also need at least one sub (two is always superior but you can get the 2nd one later if you want). The Emotiva X-ref 12 is only $699 and does the job just fine:
If you went for active speakers, you only need a processor, not an AVR. Again, Emotiva is a fine budget choice. The UMC-200 is only $599. Ofcourse, an AVR will give you more bells and whistles. The Denon AVR-X2000 is $649 and has more power than the $449 AVR-X1000.
The Oppo BDP-103 is the obvious choice for Blu-ray. Nothing better for the price. Alternatively, you could skip the AVR, get the superb $1,199 Oppo BDP-105 and connect that straight to powered speakers and sub. The only thing missing then is a digital room correction that comes standard with surround processors and AVR's. But if you get a $75 mini-dsp UMIK-1 you can sort that out to a degree anyway using a mac or PC.
Here's what I would buy:
5x Mackie 624mk2 @$500 = $2,500
1x Emotiva X-ref 12 sub = $700
1x Oppo BDP-105 = $1,200
1x mini-dsp UMIK-1 = $75
1x Samsung 553 = $1,000
Which is about $1,000 over budget after you add cables, but what a fine choice it is! Using the Oppo BDP-103 instead would save $700 at an only modest quality drop, if any.Edited by erwinfrombelgium - 5/13/13 at 3:55am