A couple of years back I picked up a factory reconditioned Harmon Kardon 70 wpc stereo receiver for $160 delivered. Sounds as good as my $700 Rotel stereo receiver, tuner is better at pulling in stations. Front panel controls are scary cheap, but work (has a remote). Overall the unit weighs 35 pounds and is rated to produce 42 amps! The left channel did distort badly before going out completely, but HK stood fully behind the 2 year warrantee and provided no hassle service by recommending several local repair shops and wanted the name of their factory repair guy as they practice a three strikes, you're out policy for their repair folks.
The HK is in my 2.1 HT system (obviously I'm not a much of a video freak). The speakers I'm using are Ascend Acoustics CBM-170s and they're fantastic! Extreme content value, sound even better. Would kick anything from Paradigm, B&W, or Dynaudio in the pants at twice the price. Those provide a black and white outline of the music, the 170s do that and full in the color of the music. They're small but rather fat looking two-way standmounts, 89 dB/w/m, 70 - 20,000 Hz. The black vinyl cabinet finish is made for frequent moves or rough environments (I have 4 teenagers, don't ask), but that's the low point. $340/pair.
A Toshiba 3960 ($60) or Panasonic S70 ($100) universal player would work great. Add cheap cabling (CAT5 is wonderful and nearly free) and your in for under $600.
