I know a little something about this... (Score 5)

I've spent the last 2 years spending everything I had on audio and home theater. I was such a nut I had 2 seperate systems. One was exclusively for 2 channel audio listening and the other was attached to a 61" Sony XBR300 TV for home theater.

My current home theater rig consists of the following:

61" Sony XBR300 TV

Lexcion DC-1 Preamp (rumor has it George Lucas had one of these things :) )

Parasound HCA-1206 power amp

Toshiba 5109 DVD player (has progressive out)

Sony DSS

Some damn SVHS VCR that I have yet to use

Citation 7000 series speakers

Now... all of that stuff retails for something on the wrong side of $30,000, but you'd be a fool to think I'd actually spend that much money on it. I picked up the power amp, preamp, and speakers all used, at an average of about 1/3 of retail pricing.

So... my whole hearted recommendation is spend some time looking at the used market! Also, stay away from the Good Guys, Circuit City, etc. These stores carry CRAP. Find a local high end dealer and talk to them. Usually their prices are movable and you can do some wheeling and dealing. Also, checkout auidoadvisor.com. They currently have what appears to be the deal of the century at the moment... A complete KEF (excellent speaker brand) 5.1 speaker system for $900.

Here's a short list of good brands to look for:

Electronics (receivers, preamps, amps, etc.)

NAD

Parasound

Some Denon/Yamaha

Anthem

Sherwood Newcastle (make sure it's NEWCASTLE!)

B&K

Adcom

Speakers:

B&W

Paradigm

PSB

KEF

NHT

Aerial

Energy

Boston Accoustics

Brands to stay away from:

Sony (some of the ES Stuff is okay)

BOSE (don't by it, no matter what)

sub $500 recievers from ANYONE (these things are just piles of junk)

Kenwood

Sherwood (non newcastle stuff)

Yamaha speakers

Cerwin Vega

JVC (their SVHS VCRs are the best, however)

Awia

Also, here are a few good links to used audio sites:

audioshopper.com
audiogon.com
jmsound.com
jeffsoundvalues.com

Hope that helps, and for what it's worth, I've spent a good amount of time these past few years learning about all of this crap and if you use the guide above you should get a perfectly good system. I've left out super high end brands, thinking most people not be interested, but if you are just ask.