My own thoughts so far are that you don't need 7.1 surround. Most movies are tuned for 5.1 anyways and if you go 5.1 for now at least, you'll be able to invest in a little bit better equipment. Yamaha makes pretty decent stuff, but I would look around as well.
Receiver: Denon, Marantz, Onkyo all make really good stuff. Personally I like the Marantz's, for your budget, but a model from Denon and Onkyo would be excellent as well.
As for your speaker setup, your front three speakers are really your most important. I've heard setups where the surrounds were $100 surrounds and I've heard setups where the surrounds were worth thousands. The latter definitely sounded better, but the cheaper surround setup wasn't terrible either.
My point being that your front three can really make or break your setup, while your surrounds are really the whipped cream and cherry on top.
I don't know how willing you are to look at ID companies, but tremendous value for your money if you are.
Totem and Kef are two brands that are worth looking at. Going out and listening to different brands and models is really the best way to figure out what you want to get, I wouldn't get set on the yamaha all the way thing you've got going on up there until you've heard some other speakers.
Where are you located? That would also help with recommendations. Welcome to the forum and good luck
