For buyers on a budget--which is where I was early 2011--AND smaller/living room purposes: I HIGHLY recommend ONKYO.
Their boxed 7.1 packages cannot be beat, IMO, for the price. Plenty of connectivity and power for general entertainment purposes, and plenty handsome. They've been ranging from US$350 to $550, but I believe their price'll drop for the Holidays.
If you are used to 5.1 HTiB's whose receiver/amp is also the DVD/Blu-ray player (and which drives the "passive" subwoofer along with all the other speakers), look no further than ONKYO. Once you try it you'll see how much those suck in comparison. Of course, you'll have to hook up the DVD/Blu-ray/CD players or gaming consoles separately, but this is also a plus. The "active" (or "independently powered") subwoofer that comes with ONKYO HTiBs won't drain the receiver's amp either, and is another plus.
I would NOT recommend their 5.1 line, EVEN FOR smaller rooms. The added 2 speakers sound great as front heights with Dolby PL IIz processing--some even prefer that over back surrounds. As a matter of fact, the only real reason surround backs are needed is for movies with emphasized back channel mixing. Music? Games? Most movies? In my experience, they may sound even better with front heights. Also, I had the chance to listen to an ONKYO 5.1 setup once in a vacation home and there is a BIG difference both feature- and audio-wise! Do yourself a favor and go for the 7.1, in ANY case.
Should you choose to go the ONKYO 7.1 HTiB way, keep in mind you may need to get speaker cable for longer runs (or simply because the included cable--though practically color-coded--feels cheap). I used the ones included and only needed extra when I finally decided to install the back surrounds on ceiling mounts (before that, front heights proved good enough!) and they served their purpose.
The model I got was--IS still going strong!--the ONKYO HT-S5400, but their current model is the 5600.
Happy Holiday Shopping!