I have a home theater system, it's an Aiwa. The speakers, dual cassette player, and 3 CD carousel were all included! I have a Pioneer DV-444 connected to this system and it works very well. I also have a Panasonic stereo VCR connected.
My TV is a 27" Panasonic. It's about 4 or 5 years old. It came with an S-video input. I use that input for the cable box since I use it the most. The DVD player runs to the front inputs via 3 RCA cables that came with the player.
My level of interest in home theater may or may not be as high as the original poster's. However, I too would recommend the Pioneer... any of them... they will play DVD's and a bunch of other formats.
If you want to separate your 2-channel from the HT setup cleanly, use the digital output of the DVD player to a DAC and run that to a separate pre-amp and speakers.... You can still use the analog output of the DVD player to go to your HT setup.... or you can go vice-versa if you have a digital input in your HT setup.
So, does that answer the question? No.
I re-read your post and now understand you want a CD player for a system that is in your living room. Is this a 2-channel system or is it also HT? You want to be able to play CD's in your living room at the lowest cost. Since that's all I know, I can only recommend any CD player that is inexpensive.