Hmmm. We needed to be reasonable with what to expect in your budget. It may seem that a full surround speaker set, subwoofer and receiver, can be put together in your budget, but, you'll sacrifice quality. Also, while you can get loud with the volume for movies, with extended loud music sessions (especially, MP3s and dub step), your receiver and/or speakers will be at risk of failure. Most certainly, the setup will not rock your party like a night club.
I suggest you start with a good set of stereo speakers, a subwoofer and receiver to drive them. At a later time, add the center and surround speakers.
For the receiver, get the Denon E300. This one has Pandora, Spotify and Airplay built in. It also has Audyssey Dynamic Eq and this feature gives a fuller thump even at lower volume.
http://www.accessories4less.com/make-a-store/item/DENAVRE300/DENON-AVR-E300-5.1-3D-Networking-Receiver-AirPlay/1.html
Speakers, Pioneer SP-FS52-LR (if you wait a little, these should go on sale for $200/pair) or Infinity Primus P363 (these are available at Fry's in-store price $220/pair).
Subwoofer, on the AH classified there is an awesome sub for an unbelievable price.
http://forums.audioholics.com/forums/classifieds-sell-your-gear/87499-fs-epik-legend-subwoofer.html