Some stuff I like (this list is far from complete):

Speakers:
VonSchweikert (The VR-1s are a great value)
My drummer bought this system - Hsu Research
Epos - not great, but good-for-the-money

Receivers/Amps:
Jolida - good stuff for music, but not necessarily for HT
Vincent Audio
Denon, Marantz, Onkyo, Sony ES, and NAD are all pretty dandy too.

Disk Players:
You'll have enough of those between the XBox and PS3.
Do remember to attach the digital audio out to your receiver (duh).
My advice; wait until there's a good universal disc player you like.

Cables:
There's tons. I like most of what http://www.audioadvisor.com/ carries.

Remember, this is supposed to be fun!

 

I have a $10k+ sound system..and it's just 2 speakers, a sub, and cd player. Everyone thinks I'm nuts. If it was stolen, I'd buy it again in a heartbeat.

If you can't tell the difference between a super expensive stereo and just a nice stereo, then save your money and buy the cheaper one. If you start listening to more expensive stereos and can start hearing the difference, then you're going to start snowballing down a never ending upgrade path.

 

I have an insurance ryder on my equipment

if the law of diminshing returns exists i'm still trying to find my cut off point. In the past 15 years i've had at least $150k worth of gear go through my system.

 

http://www.svsound.com/products-sys-sbs_black.cfm

That's a great set of speakers for $1000 including a booming sub.

 

One rule that always applies to people seeking budget HT setups: $200 more gets you much better sound. A $400 HTIB setup has to skimp somewhere, and the speakers are what suffer. For $600-700 you could get MUCH better speakers that will blow anything away that comes in one box. $200 7.1 receiver, $300-400 on 4 bookshelf speakers, $200 on sub, total ~$700. A good setup would be 2 pair Athena AS B1.2 ($240), 1 Athena AS C1.2 center ($150), BIC H-100 self powered Sub ($200 on ebay.. best sub under $400 BAR NONE), Onkyo, HK, etc 7.1 receiver $200.