I'm not nearly the audiophile these guys are, but I've had a system for several years now. I put maybe.... $1k into it (...okay.. maybe 1500) and I've been more than pleased. It's all midrange stuff, but it isn't prepackaged. I do have to agree that the best way to go for longterm system use is to get a good receiver and separate dvd player. The receiver is the cornerstone to your setup. I've got an old Pioneer that has been great (yah yah.. you guys probably slam Pioneer). If I were to get one now without spending 10k or anything, I'd go with a nice mid range Denon. They make great products.
Of course, you can always buy a pre-packaged set in a box for 300 bucks, but you'll not be nearly as satisfied with it over the long haul probably.
I bought mine in pieces and felt great about doing so.
First, I bought a receiever and two front speakers (nothing fancy even.. two good 100watt bookshelf speakers by Yamaha).
Second, dvd player
Third, really good JBL center channel (buy a good center, nuff said)
Last, Rears and Sub (sub makes the difference baby)
I don't think I spent more than $250 on any given speaker, and my receiever was around $500 (at the time - this was 5 years ago, mind you - it doesn't even have DTS. GAH!)
All in all, the system still cranks and I didn't blow 10 Gs on it. My friends and family are still blown away and nobody I currently know has a system that sounds as nice. Now, I need new cables desperately, because mine are crap, but hey... that's how it goes. I also lost my theater room because I had another kid and now I hardly ever get to watch movies with good sound =/...again, that's how it goes.
