Hello,
The budget includes: L/R speakers, center speaker, surround speaker, subwoofer, and anything you may deem fitting.
I'm going for a 5.1 set-up centered around my PC (specs below) but also is connected to an HD-DVR cable box. The PC will handle all DVD's and music so I won't need a DVD player. I already have a main display in my Westinghouse 37" that doubles as monitor. I listen to anything from Miles Davis to Bob Dylan to The Clash to A Tribe Called Quest but not heavy metal and the likes. I'm moving next month so this will all be in a near empty room minus a couch in the middle I suppose.
The cable box is connected directly to the TV via HDMI cable and will be the only product using HDMI. The cable box and PC (via break-out box) can be connected to the reciever via optical or RCA.
I have a pair of Cerwin-Vega MX-250's that need some cosmetic work after being damaged in a previous move (don't let clueless woman handle electronics, it's the leading cause of water damaged speakers) that can be included or maybe added later to make a 7.1 set-up. So far my only purchase has been a Pioneer VSX-816K receiver that knocks my budget down to $1,800. It should also be noted that I'll be testing out all contenders before I make a final purchase.
Receiver: Pioneer VSX-816K
http://www.pioneerelectronics.com/pna/v3/pg/product/details/0,,2076_310069809_299915436,00.html
HDTV/Monitor: Westinghouse 37"
http://www.newegg.com/Product/Product.asp?Item=N82E16889234001
PC:
Case: Lian-Li PC-A16A
Case/Heatsink Fans: Silverstone FM121 (3x)
Fan Controller: Zalman ZM-MFC1
MoBo: Asus Commando
CPU: Intel Core 2 Duo E6600
CPU Heatsink: Tuniq Tower 120
Thermal Compound: Artic Silver 5
RAM: Crucial Ballistix 5-5-5-12 @ 1000MHz (2 x 1GB)
GPU: eVGA GeForce 8800GTX
HDD: Western Digital Raptor 150GB (2x in RAID0)
HDD: Western Digital Caviar SE16 500GB
DVD Burner: Samsung SH-S183L
PSU: PC Power & Cooling Silencer 610
Sound Card: Creative Sound Blaster X-Fi Fatal1ty