What do you currently have for your audio components? If you have a couple of digital audio optical/coaxial inputs, then you may be just fine for audio considering the speakers which are in use. A photo or two, or link to photos of what you have may be beneficial.
For a TV, you really want the biggest thing which fits in what you have. If your 32" tube TV is not a 16:9 model, but a 4:3 model, then you really need to go to at least a 40" display. If you've been completely happy with the size of your 32" TV, then the TV has a 19" tall image. The only way to not have a SMALLER image is to have at least a 39" 16:9 display which also has a 19" tall image.
But, with HD programming, you should be considering a 50"-60" display from a 10' viewing distance. Since the likely won't fit, you really need to look at the largest display which fits into your WAF demanded cabinet. Reality is, the cabinet should go, or be modified, to allow for the fact that we don't live in a world from 14 years ago.
I get it though, WAF is WAF.
So, measure a couple dozen times, give us a real height/width to work from, then recommendations can be made.
The Denon linked above is a very fine example which should work nicely, and I agree with others that unless you intend to game, then skip the PS3 in favor of a lesser expensive, well performing model.
If you want further/faster/easier streaming options, then consider getting a Roku player which is designed to stream content.
Also, may be worth considering getting a wire to the TV location for Internet if at all possible. If you own the home, then this type of upgrade just makes sense for the long term.