Onkyo has long made some of the best <$500 HTIB systems due to their decision to include decent receivers in a HTIB package, but their weakness has traditionally been their speakers and they are usually the first thing that people upgrade when they have more money to work with. If I were you I'd start with a pair of decent quality budget full range speakers like the Pioneers and then add bits (a matched center, surrounds, and a good subwoofer) over time as money allows. If that's not doable (or they'll be destroyed by roommates) then I'd take the package deal plus subwoofer route that someone else suggested.