Welcome to the forum, What do you use as a source, I take it this is a music only system? Do you use an ipod, cd player, ps3, pc, ect? What cables do you interconnect with HDMI, RCA, Toslink?
For me with music I would go with an integrated amplifier, pair of bookshelfs, and a subwoofer, use fmods and the subs xover to separate the highs and lows... I'm not sure how critical of your sound you are and it sounds like you like it loud, your budget will be better spent on an efficient bookshelf {you get more for your money} and a pair of subs {when you double the subs you only need 1/4 the power to make the same sound as a single sub, so 2 subs will have more than double the output at 1/2 the power setting}... Normally seled subs are best for music but with your budget the most inexpensive sealed sub I like the sound of is $500, and would blow your budget...
So start with a pair of bic f12's {I like these subs, and when doubled up, they have a ton of output for $370
http://www.amazon.com/BIC-America-F12-475-Watt-Subwoofer/dp/B0015A8Y5M/ref=sr_1_1?ie=UTF8&qid=1379334329&sr=8-1&keywords=bic+f12
Next an integrated amp for your bookshelfs, you can use an avr like you mentioned above if you need hdmi inputs and video switching, but for music where you are going to use a dac or plug in an ipod I prefer a direct path with none of the video circuitry and garbage in the way, plus integrated amps seem to stand up to abuse and be 4 ohm stable
http://www.parts-express.com/pe/showdetl.cfm?partnumber=300-812&utm_source=google&utm_medium=cpc&utm_campaign=pla
But that only leaves $125 or so for your bookshelfs.. That limits what you are going to get greatly... I like these but they are $75 over budget
http://www.amazon.com/Behringer-B2030P-Ultra-Linear-Reference-Monitor/dp/B000N94S7O/ref=sr_1_8?ie=UTF8&qid=1379335658&sr=8-8&keywords=behringer+truth or you can go with something like the Pioneer AJ speakers others will chime in where you can get them on the cheap...
then you will need some cables splitters and a pair of fmods
http://www.amazon.com/FMOD-Crossover-Pair-High-Pass/dp/B0006N41KG/ref=sr_1_5?ie=UTF8&qid=1379335716&sr=8-5&keywords=fmod so budget in another $40 or so for that stuff..
By using a decent monitor bookshelf and crossing it with the fmods at around 100hz hp, you will free up your amps power for highs {lows take up a lot of your amps current}, then by using dual f12's you will be able to run your subs at a lower gain per sub and it makes the subs sound smoother and easier to place... If you can swing the budget, I own a pair of truth monitors, and they are really nice, I have a lot of experience with the f12 subs, and also will do what I think you are looking for...
