Best place to start when upgrading?

With the little info you gave. I would start with the speakers. The thing to rember with speakers you get what you pay for. Great speakers are not cheap. Next do away with the chzzey reciever.

Start anywhere you can. Shop for deals on components or speakers. Once you commit to a brand of speaker stay with it for your whole system. Add a sub that compliments your speakers. This will take some time and effort. But when it's done every movie you watch will blow you away. Gotta go, The amps have warmed up and I just rented Pearl Harbor:~)

I am not really fimilar with what equipment is available, so it is hard for me to set a budget and say what it is. As soon as I know what is out on the market, I can make a better assessment of how much I will be able to spend. I have an idea of what I want to do, but the cost I am unsure of. I want to build a PC that will store/play DVD's, CD's, and maybe MP3's and be the center hub of the Home Theater. Also have a PC that will record/store DVD's, CD's, and MP3's, these 2 PC's will be networked together. Some how integrate the AMP(s), Home Theater Processor, speakers, sub, and the Video, wether it be a monitor or a projector into the PC used in the Home Theater. In building these PC's, they will have to have a fast processor, I am thinking a minimum of a gig each. The memory at least 1 gig, hard drives (biggest available at the time of buildup for storage). High end video, sound, and networking cards. DVD+RW and DVD-ROM on the PC which records the media(For home personal use ONLY), and at least a 17"-19" monitor. The PC that is used in the home theater will have a DVD-ROM and either a very large monitor or a projector. I have been informed to use SCSI when interconnecting the innards of the PC's for the purpose of non-intruptable Videostream through a PC. Has anyone ever done anything like this?? Anyone know of web sites/pages where someone has done this or something like it? I guess the tips I need for now are websites to do my research from, PC sites and Home Theater Sites. If anyone has any tips, ideas, or help it is welcomed with an open mind. Thanks

The mag Stereophile for HT has had an ongoing series of articles about how to construct a PC based DVD playback system. As a practical matter there's no reason to store DVDs onto computer hard disk. Due to the storage requirements it's not very efficient. If all you want to do is setup a computer based music jukebox, then do a forum search for "i-tunes". There a thread where I describe the system I put together. It's not difficult to do, but there are a number of different approaches.

With the PC being the heart of your system dont sweat the gear.
Most mif fi gear will get you the resoulotion you crave.
No point spending big bucks if your source is not going to be that good.