Alex made very good recommendations, both in terms of a system and in how to go about researching what you want. There are lots of options out there to chose from. The one thing that I'd change is that I wouldn't recommend buying a DVD player now that we know that you have a PS3 - because it can play DVDs, too.
Don't rush out and buy a receiver before considering speakers. Some speakers have nominal impedances that are 4 ohms (or lower), and some receivers are not designed to handle those types of loads. For most people and most speakers, you could go get any number of receivers in the $300-$500 range and be just fine. However, it is something to consider.
For a subwoofer, I'm very happy with my sub from SVS (svsound.com). They are definitely not the only game in town, though. There are many models of sub available at local stores, as well as from internet stores and internet-direct stores. SVS is my favorite because of my personal experience, but many here have subs from other brands that they really like.
EDIT: I see that Alex got a reply in while I was typing. Color TV - nice.
I do need to step into this century on that, for sure.