Insignia, as a brand, is a no-go zone for me. If you can find a decent product from a respected name brand like the Infinity, I would recommend that over any Insignia.
If you are thinking of upping the budget to get better quality, there are many more choices to make. For instance, you could spend $2-300 and get one nice pair of main speakers, then build on that over time as budget allows into a 5.1 system. Over time, that will produce the highest quality system within your budget. Start with a nice pair of bookshelves, add a sub later, then add a center, then move the bookshelves to surounds and get a better set of mains.
One thing is sure, it's best to decide beforehand where you want to end up. False starts and premature replacement of components can get expensive.