Alright so here is my journey so far.
I started out looking at the Onkyo 7.1 HTIB's for around $700. Then I realized that I could buy a decent Onkyo Receiver and a separate speaker package a fair bit less. From there I started researching and have found that I most definitely do not need a crappy 7.1 home theater system for my living room, and a 2.1 or 3.1 setup would be much better allocation of my funds. This lead me here.
I am thinking about getting the Onkyo SR607 for a receiver (somewhat future proof), and I have about $500 left over for speakers. I am not an audiophile by any means. I consider my 2.1 Klipsch PC speakers to good sound, so I gather that I essentially know nothing.
I would also like to add that I listen to more music than watch movies. I listen to Metal, Blues, and Classic Rock mostly, so whatever I get I would like to keep this in mind, This will also be connected to my HDTV and PS3, and I do watch some movies.
I am fairly certain a pair of floor standing loudspeakers and a decent sub will get me off the ground. This is all so overwhelming I have no idea where to start.