Bedroom setup
First, take the specs of that entry level HTIB with a grain of salt. The small speakers that come with this kind of setup aren't capable of playing very loud without a lot of distortion.
As an alternative, I would suggest the following:
Athena Audiotion or BIC venturi bookshelf speakers - $100.
Refurbished Onkyo 502 receiver from ecost - $100.
This setup will perform a lot better in your bedroom and you can add extra speakers and a sub down the road to create a surround sound system.
And yes, you can play CDs using any DVD player. Some will even play CD-Rs and CDs with MP3 files.