How big is your room? That will determine if you should get a front projector, rear projector, etc. Make sure to get a good display that can do 720p. You won't get anything that can do 1080p with your budget. Forget interlaced displays (1080i or 480i).
For speakers, B&W Nautilus are great. Lexicon MC-1 pre/pro. Whatever amp you want (Theta Dreadnaught?).
For speakers, B&W Nautilus are great. Lexicon MC-1 pre/pro. Whatever amp you want (Theta Dreadnaught?).