Hi there!
Don't worry for a second about starting out with a smaller budget and a "beginner" system. We've all been there! I started with an RCA HTiB, myself. Took me all of about 3 months before I was dying to replace it and regretting that I'd bought it in the first place, but that's why you're here, right? To avoid that same type of regret and benefit from the experiences of others
So let's get you started off right, shall we?
As far as HTiB systems go, Onkyo's are almost certainly the best. But I have to say that if it were MY money, and I were just starting out all over again, but with the knowledge and experience that I've accumulated intact, I'd go a slightly different route. Here are a couple of paths for you to consider:
1) One thing that I don't like about the AV Receiver in the HT-S5500 is that it only has Audyssey 2EQ for auto-setup and room correction. 2EQ is very bare bones and does not EQ the bass at all! Bass is where you need EQ the most, so that is a negative. It also has only 4 HDMI inputs. And, as you pointed out, the included subwoofer isn't that great. It's got a lot of distortion.
Getting good bass is very difficult. There are no shortcuts. It takes what it takes, and you can't magically do it for less. But if you are limited by your budget, it's more important to at least get bass that isn't full of crazy high distortion, and is at least somewhat accurate. You'll read a lot about "one note" bass or "boomy" bass. Those sorts of bad sounds happen when a subwoofer resonates really badly. Imagine a rather flimsy box that can easily flex and vibrate. That's what you get with a lot of really cheap subwoofers.
The word "distortion" can mean a lot of things. But the easiest way to understand it is that any recording contains a signal that tells the speakers and subwoofer to play a certain note for a certain length of time at a certain loudness. Any failure to reproduce exactly what the signal says to play is a form of distortion. When you hear a system with very little distortion, it never really sounds "loud". When you turn up the volume, a very low distortion system will just make everything sound "closer". When a fairly small and low power subwoofer - like the one in the HT-S5500 - is being described as "loud" by a lot of people, that's a clear indication that it's got high distortion. It'll sound "boomy" and "muddy" and maybe "one note-y". All ways of saying "distortion"
So what to do?
Well, the first option is to still go for a full 5 or 7 speaker package with a subwoofer, and then combine that speaker package with a better AV Receiver.
For this option, here are the products I would buy myself if I were starting over:
Onkyo SKS-HT540 7.1 speaker package - $250
Denon AVR-1712 AV Receiver - $250
Now, I know I've just bumped you up from a $400 HTiB to a $500 system. And at first glance, it might not look all that different. But there are a few key differences that make this a substantially better system.
To start, even though these are still Onkyo brand speakers, these are not the same as the speakers in the HT-S5500 HTiB. All of the speakers in the SKS-HT540 package are larger and better. The subwoofer has nearly twice the amplifier power and a substantially better cabinet. And you can get the same
Onkyo SKW204 subwoofer separately.
The SKW204 sub always manages to bring a smile to my face whenever I hear it
It's by no means comparable to the $550 and up subwoofers that we commonly recommend around here. But I actually really like recommending the SKW204 whenever someone has less than about $350 to spend on a subwoofer. If you're going to spend less than $350 on a subwoofer, you're far better off spending A LOT less than $350. That way, you can save up much more quickly for a truly great $550 subwoofer, and not waste a penny, while still getting surprisingly good bass from the SKW204 in the mean time. It's a very large difference and upgrade from the subwoofer in the HT-S5500 package.
The Denon AVR-1712 from accessories4less is simply a steal. It includes Audyssey MultEQ XT, which is 2nd only to MultEQ XT32 for auto-setup and room correction. It is an insanely large upgrade from the 2EQ program in the HT-S5500 package. I can't really overstate how much better MultEQ XT can make your system sound.
The 1712 also has 6 HDMI inputs, and better quality amplification for the 7 speakers. What the 1712 lacks are the modern AirPlay, Network Streaming, and iPod features. But you can easily add an AppleTV, Roku or other streaming box, or an iPod dock if you want those features. And having the separate, dedicated box will give you a better interface anyway, so I'm much more of a fan of letting the 1712 handle switching between all of your sources, providing excellent room correction, and powering your speakers really well with good quality amplification.
So this is the best $100 extra you'd ever spend. Better AV Receiver, better speakers, better subwoofer. There's no question about where the extra bit of cash is going
2) Getting all 7 speakers and a subwoofer right away is one approach. The other is to only buy a pair of really good speakers right now, and then save up, and add on the other speakers later when you have the money.
You talked about buying something now that can be upgraded when you have more money. If you already have that goal in mind, then you might want to consider this approach instead. You won't have surround sound right away, but by the time you're done, you'll have way better speakers, and less money spent overall. Rather than shelling out $250 for the Onkyo SKS-HT540 package now, and then slowly replacing all of the speakers over time, you can just start with a single pair of the speakers you'd wind up buying in the future anyway. It's a different approach. It's entirely up to you. I will say though that the SKS-HT540 package really retains its resale value. So if you do decide to buy it, then slowly upgrade, once you are done, you'll be able to sell the SKS-HT540 package and get most of your money back. Or you might find another room to use the SKS-HT540 speakers in
Up to you.
If you want to start with just a pair of really good speakers, there's absolutely no better choice right now than the
Pioneer 2nd Generation Andrew Jones speakers. The 2nd generation models all end with a "2" in the model number
So what I would recommend would be to start with just a pair of the
SP-FS52 Towers . The $99 price is for EACH speaker, so a pair will cost you $200.
Later, you can add the SP-C22 Center speaker and the SP-BS22-LR bookshelf speakers for the Surround speakers. And, of course, a subwoofer - although I do NOT recommend the Pioneer SW-8MK2 subwoofer that is a part of this series. I would point you towards the
HSU STF-2 subwoofer that costs about $350, or the even better
HSU-VTF-2 MK4 at about $550 . The HSU VTF-2 MK4 at $550 is actually the least expensive subwoofer that I consider capable of "doing it all", by which I mean that it can genuinely play down to 20Hz, it can play loud, and it can do it all while staying accurate and with low distortion. For $350, the STF-2 is very good, but it gives up the super deep 20Hz extension, and it can't play as loud.
These Pioneer speakers are a landmark for low cost, but very good sounding speakers. This kind of sound quality at this price is truly unique and unprecedented. Simply put, these 2nd gen Andrew Jones speakers sound good. Not "for the price". Just plain good. If you throw in "for the price", they are astonishing.
The Denon AVR-1712 from accessories4less remains a "lock", IMO. If you really want AirPlay and Network features, you can pay
$50 more for the AVR-1713 , although the 1713 has only FIVE amps, not the 7 found in the 1712. To me, that's not a good use of $50 extra. With the 1712, you can keep all 7 amps, and then use the $50 lower price to get an AppleTV or other streaming box instead
If you really want AirPlay/Network AND 7 amps, you can get the
AVR-1912 or
AVR-1913 . But these cost more ($320 and $350, respectively) AND they step DOWN to regular Audyssey MultEQ. Remember, the 1712 and 1713 have MultEQ XT. Stepping down to MultEQ isn't the end of the world. Both MultEQ and MultEQ XT will EQ the bass, which, as I said, is where you need EQ the most. But, like I keep saying, the 1712 gives you 7 amps, MultEQ XT AND the lowest price. So you can just use the savings to get an AppleTV. To me, it just makes the most sense
I hope that helps! These are certainly the two options I would consider if I were in your position. It's a great time to be starting your home theater journey. I wish I'd had these options and this knowledge when I was just starting out
