I've personally bought many used items, it's certainly the best way to get a good deal. However, you have to make sure everything works in a situation where you making a private purchase.
Pretty much any mid level receiver up to the crux of HDMI will be considerably cheaper than one with. I watched a Yamaha RX-V659, an extremely capable receiver, sell for less than $100 on ebay the other day in excellent condition with all the accessories.
Watch stuff like this -
http://cgi.ebay.com/ONKYO-TX-SR800-THX-SELECT-7-1-DIGITAL-AV-RECEIVER-EX-NR-/230528385077?pt=Receivers_Tuners&hash=item35ac900035
They aren't in high demand and there's not usually a high level of interest generated with this models that come before the dawn of HDMI. Take a look at used Yamaha, Onkyo, Denon, Pioneer Elite, and Harman Kardon receivers.
On a budget that tight I would look at used speakers too. Start browsing ebay, forums, audiogon, and learn about different speakers. Keep an eye on your local craigslist and if you see something interesting always be sure to research the item rigourously. If you can't find reliable data on it come back here and ask us.
Just understand, it is unacceptable for people to ask $100 for a bottom of the line Pioneer receiver from 10 years ago. I've seen it time and time again when someone joins this forum and proposes a list of receivers that are so old they don't even have Dolby Digital decoding. Then they ask, "which one would you buy for $100?", and they're often all completely overpriced. The most important thing is that you have to be patient. It is not likely you're going to be able to piece a used system together overnight that's going to be worth your investment.