So all I have is a 46" TV. Live in a condo with a decent sized living room. Basically need something to listen to music to start off (don't really watch movies much or play games). BUT, need something that can be upgraded to do all those stuff later.
Price: Well, I thought I can get a decent setup for $600 total, but then I realized that the receivers I like itself cost that much.

... Money as such is not a big issue if I know I am spending it right. But lets say $1500 total for a 7.1 setup.
Here is what I do now: A lot of CDs, MP3 ipods, my PC and harddrive : All for music. Listen to a lot of Pandora.
My music choice is more soft music and I like the deep soft acoustics rather than loud beats (think Bon Iver, Jack Johnson, instrumental, vocals). I hate noisy systems.
I do watch streaming videos from my computer once in a while (is this where upconversion comes into picture ?).
So my choice of receiver should probably have: Good sound, networking (maybe ?), decent power and a good GUI. But of course I am greedy so a good video processing will be cool too.
Question is I have no idea how to start setting things up. Do I really need an expensive av receiver? I do like the Denon 3310CI or the Onkyo NR807 and another one that has Pandora built in.
If I were to start with 2 good speakers for music, and wait for a good deal on all the other speakers, is that a good way to go about it?
Thanks all. As you can tell, I am a total noob.