Home Theater help?

For these people, I think they're going to do fine with finding a display that looks nice to them, and fits their budget. Then they can look at a receiver in that budget (Denon is fine, and you all know that), and some inwalls that sound descent in that price range, if that fits their lifestyle! Yes, better sound from same priced boxed speakers, but it's a tradeoff. I'd be willing to bet they'd be more than happy with the inwall solution, and some "multEQ" processeing on a Denon 2807, er whatever. So, they're not being steared in the wrong direction, IMO.
The only thing I'd qualify is if they wanted a smaller budget plasma/lcd, and maybe wether they could live with "exposed" speakers, or "on-walls", etc.

"It seems to me that saving a few bucks on inferior products is where the real waste of money occurs" (Cine100)

I wouldn't call 720p tv's "inferior!", nor would I refer to them as "a real waste of money"! Infact, if you read the reviews out there, I think the pro's comment that standard def, DVD's, and 720P sports broadcasts look better on 720p monitors, or at least as good, except on 720p broadcasts usually. Where the 1080P looks better (more critical and noticable on larger displays, or up-close), is usually 1080 broadcasts! This is what my impression is anyway.
I think to say 720p displays are a waste and "inferior" (I think that's what was being implied), is off base! My two cents...

Here's some insight on the whole 720p vs. 1080p thingy

http://www.avsforum.com/avs-vb/showthread.php?t=542817
http://projectorcentral.com/1080p_720p.htm