If this is just for music, and you don't need something for critical listening, I would be looking at
Hsu Hybrid 1 2.1 package. Very good speakers and sub for the price. It would also be a lot simpler if you just bought a modern AVR, and tossed the amp, pre-amp, processor, tuner, and equalizer. I would probably toss the CD player as well, it is so old. Keep the cassette deck if you still have tapes you listen to. I would be looking at a Marantz, Denon, Pioneer, or Yamaha AVR. One modern AVR from any of those companies will do all of the functions which that rack of equipment did, except for the source players, obviously. You won't need an expensive one either. You can get a decent one for $600 or so. The Hsu/modern AVR system will be very good for the price, much better than what you have now.
If you want to get the highest fidelity system for the limit of your budget, I might be looking at
Ascend Sierra 2s or the new
Philharmonitors. I would also be looking at the
KEF LS50s or
Wharefedale Jade 3s. Any of those speakers are extremely accurate and have very high fidelity. The KEFs and Jade 3s have been measured by third parties to have superb performance. Having heard them myself, I can attest to the utter realism of their playback. For a receiver to pair them with, I would go with the Denon AVR-X4200, for the highest implementation of Audyssey offered on that model. I might also look at the
Emotiva XMC-1 pre-amp plus a
XPA-200 amp, for Emotiva's implementation of Dirac, although I have no experience with that myself. For a subwoofer for this system, I would be looking at a
Hsu VTF3 mk5 or
ULS-15. The Hsu subs are very powerful but have a lot of flexibility in shaping the sound, so their sound can be tailored to your taste. They are also extremely low distortion subs, very clean sound, with very low compression. If you want the flattest frequency response for the most accurate sound, think about getting two subs if you have a lot of freedom of placement in your room.
By the way, if you pitch all that Onkyo stuff, remember to take all of that old Onkyo junk to an electronics recycling facility, so do not just throw it in the garbage.