Thanks for the replies. Based off what you guys said this is what I think I'll do.
Recevier
Denon AVR2106 for about $450 online
Speakers
Either:
1) SBS-01 5.1 system for $1000
or
2) X-LS 51 system for $700
(thinking this is the best deal once it comes in stock)
or
3) VT-12 6.1 system plus a VTF-2 MK-2 subwoofer for $700.
So, just need a little help narrowing down the speakers. The main viewing area (couch) is up against the back wall. What would I do with the 5th satellite speaker??? Moving couch is not an option (WAF would bottom out).
The front L/R speakers will be sit on the shelf, and the surround L/R speakers will probably go on stands to the left and right of the couch. I think installation wise that is probably the easiest for me as I only have to snake speaker wire from the attic all the way down to the floor.
Again, room is large (about 3400 cubic feet), but my budget is right around $1500 for speakers and receiver. I've got an old (15 years) set of Bose AM2 speakers and Kenwood receiver, so I think anything is going to sound better.
Let me know please
Matt