I`d spend $1000.00 on speakers, Axiom for example, check out their website and choose setup that you need. Then for $300.00-400.00 I`d get Philips Q50 DVD player, outstanding video quality, I think everyone agrees with me on this one. And with $600.00-700.00 left it`s almost impossible to find good separates , so I`d look for a reciever. In this price range you can find NAD ( T751), Rotel (RSX-972), Integra (DTR-5.3 and DTR-6) or Marantz (SR-5200 and 6200) . Compare options and features and make your choise. Good luck. I had personal expirience with Philips player and Axiom speakers and can tell you that for the money they are great. Not a big fan of recievers though .