That's a decent budget for a genuinely good "entry level" system. There are a heck of a lot of good choices in that price range these days. The good news is that you cannot really go "wrong" if you stick to the common recommendations that you will no doubt come across in this price range. The bad news is that it can be very tough to decide when there are so many choices!
The key, I've found, is to start with a little solid education
Audio in the home is, in many ways, quite a bit more complicated than video. With video, there are easily defined industry standards. You can choose to adhere to those standards, or you can choose to just go with whatever you think looks good to your taste. But at least the standards exist so that you can easily follow them if you so desire.
With audio, there are no strict industry standards. There is sort of a widely accepted concept of "best practices", but no real standards, per se.
The most important thing to know about getting good audio in your home is that it is a partnership between the gear and your room. All too often, people want to find "the best speakers" or "the best amp". Such a thing does not really exist. What you really need to find are the best speakers
for your room. The gear and the room interact to create the final sound that you hear, so it isn't just a matter of getting good gear; it's also a matter of making adjustments to your room so that the gear you select will perform to its highest potential.
Most people do not have acoustic treatments in their rooms. Without acoustic treatments, your gear is at the mercy of your room's inherent acoustics. This isn't the end of the world
But if you truly want to glean the best possible sound, it's important to consider acoustically treating your room so that it provides a better acoustic environment.
I'm a big fan of both Auralex and GIK. Check out their websites and you'll start to get a better idea about acoustic treatments. They can be plain and unobtrusive, or you can even get treatments that have custom art printed on them so that they not only improve your acoustics, they also act as decoration!
With your budget, you're not going to be able to go crazy with custom acoustic treatments. But I just want to get you to consider acoustic treatments is all. It's just something to think about and keep in mind. And if you have the funds, certainly a worth-while investment.
Personally, I am a fan of having very neutral speakers that "tell it like it is" and do not hide anything, nor miss conveying the details in your soundtracks and music. I also cannot stress highly enough the importance of having really good bass. Having excellent bass is what makes the difference between a "good" sounding system and a "great" sounding system.
Another factor is going to be looks. Some people like plain, black speakers that don't really draw attention to themselves. Other people like a "prettier" speaker
Once you nail down all of these parts, the other very important factor is proper placement. A lot of people spend good money on good gear, only to muck it all up with really bad placement. Follow the Dolby and THX speaker setup guidelines and you should be alright.
The trickiest part is often the surround speakers. So many people just buy matching bookshelf of satellite speakers, plunk them at ear level somewhere behind the listening position and figure they've got surround. The surround speakers are actually meant to be placed 2-3 feet above seated ear height - so about 5-6 feet off the ground. The surround speakers should also be no less than 2 feet from the ceiling. The real trick is to decide if you want direct-firing surround speakers or diffuse surround speakers. If your goal is to recreate the same sort of sound that you would hear in a movie theater, then you will likely want to use diffuse surround speakers. But it is extremely important that you are able to place diffuse speakers exactly where they ought to be. Due to this placement requirement, direct-firing surround speakers are actually a better choice for many people.
If plain looks are ok by you, my "go to" recommendation for your price range would certainly be SVSound. Their S-Series speakers are very neutral and accurate and a great deal at their price point. They are also a sealed design, which allows them to be more easily placed in almost any room.
There are the STS-01 towers if you want tower front speakers. The SCS-01 is a great center speaker and you can match it with the SCS-01M speakers to have three identical speakers across the front if you are ok with a larger bookshelf front L/R pair. The SBS-01 are also great front speakers and great direct-firing surround speakers.
If you want diffuse surround speakers, Emotiva's ERD-1 are a great sonic match to the SVSound S-Series speakers.
And, of course, SVSound can offer great subwoofers. The PB12-NSD is a particularly excellent performer for the price. And in a package deal with some SVSound speakers, the price gets even better!
Now, here is a tip that I cannot stress highly enough.
Decouple your subwoofer. You know how you can usually hear bass throughout your entire house? How even if the higher frequencies are quiet or inaudible, the bass just seems to penetrate throughout your entire home and everyone in every room can hear it? That is primarily due to structure-borne transmission of the sound. In simple terms, your house's floor shakes in sympathy with the bass frequencies. If the floor shakes, the walls shake and the ceiling shakes and that sound gets carried through the physical structure of your home. Not only does this bother everyone (especially neighbors in an apartment building), but it is also distortion. You are supposed to hear the bass coming from your subwoofer, not the bass sounds created by the shaking of your building!
When you decouple your subwoofer, you prevent a great deal of that physical shaking from happening. The result is that your neighbors or other people in the house are bothered MUCH less. And you are treated to far more accurate, "tighter" sounding bass in your theater. If you have tower speakers, you should decouple those from the floor as well.
My absolute favorite decoupling device is the Auralex SubDude - also known as the Auralex GRAMMA. It is a simple device - a carpet-wrapped MDF platform on top of some acoustically inert foam. But it does a tremendous job of decoupling your subwoofers and speakers and its effects are immediate and extremely noticeable. This is not a recommended product...this is a MUST
For a receiver, I would definitely point you towards Onkyo for your budget. Onkyo continues to deliver very good sound quality - which is the most important thing in a receiver - but they also deliver up-to-the-minute features and a class-leading number of inputs. I prefer to recommend a model that has pre-amp outputs (in case you ever want to add an separate amplifier in the future). So the TX-SR707 is the model that I would recommend to you.
So the Onkyo TX-SR707 receiver, SVSound SCS-01 center with SCS-01M or STS-01 front L/R, the SVSound SBS-01 (direct-firing) or Emotiva ERD-1 (diffuse) surround speakers, SVSound PB12-NSD subwoofer atop Auralex GRAMMA decoupling riser.
That is my recommended surround sound system to you! Also, do not forget to poke around the Auralex and GIK Acoustics websites to learn more about acoustic treatments
Best of luck!
