Starting small home theater, need advice

I think optical cable is bandwidth limited, and cannot carry high resolution audio that comes along with a blu ray signal. Even if optical cable had the bandwidth, you cannot split off the high resolution audio (Dolby True HD for example) from the blu ray player and transmit it on an optical cable. I am not sure it can even carry 7.1 audio data, though I know it can carry dolby digital 5.1...I do this at home.
YEAH...that's a good deal on the Onkyo 717, and Amazon is an authorized Onkyo dealer...

At this level I'd say minimize the cost on the receiver and put more of the dough in the speakers. Just make sure you get the features you need. I don't think preamp outs are necessary -- chances are if you're going to add higher quality amplification you'll want to add a better prepro to go with it. And I'd recommend getting a model with some kind of digital sound correction since you've mentioned you may eventually go to a 5.1 setup. I noticed you could get the Pioneer VSX822 from B&H Photo for $272, and that should get you everything you need or the 1022 for $299 if you want things like video upscaling, component video input, etc. Onkyo TX-NR414 also looks very good for $295 and may have more inputs if that's a concern. Any of these receivers will probably be fine, but speakers are a tougher and more important question at this price level imho.

Buying used can be great but also very hit or miss, and finding front L/R/C used can be tough (although the Def Techs Realremo found could be good). Another route would be to look at something like Hsu Research Value 2 package (3.1 setup) that you could get for $800 -- good value since you buy direct from manufacturer and avoid dealer markup, and you can add matching surrounds later as budget permits (and you get a warranty too). Short of that I'd look for a good pair of used monitors and a sub and try to find a matching center when it becomes available. If the monitors are decent quality and set up well you may not miss the center channel too much for a while. I think Paradigm (Monitor series Center 1 for example) and B&W (used Matrix HTM with single mid and top-mounted tweeter) make some pretty good center channel speakers so they might be a couple brands to look at for monitors as well. Since 85% of your listening will be for movies/TV I'd try to get the best center speaker I could since 80% of what you hear will be coming from it, and there's nothing worse than listening to voices in particular through a crummy center speaker (probably better to use no center in that case).

If cables/interconnects aren't in the budget you can get by with some from Monoprice (definitely for HTMI cable) until you can affort to upgrade. Again, I'd put as much money as possible toward the speakers since they'll make the biggest difference on an absolute basis at this level (assuming you don't use a garbage receiver or cables). Hope this helps and best of luck.

Thank you so much all for your comments on my situation. It is greatly appreciated. Since I promised that I would stop asking questions, this is just a curiosity :)

You have all suggested I get "monitors". What's the difference between monitors and full range speakers? Is it simply the frequencies that they can reproduce? Do monitors require the use of a subwoofer? Or does a monitor provide a more true to life reproduction of what was intended? This would be as opposed to full range speakers that could "color" the sound in the way the manufacturer intended, maybe to give it a characteristic sound?

Again, no obligation, but I hadn't heard that term (unless it's on stage at a performance), so I was curious.

Genuinely, thanks for all your suggestions. I'm always welcome to hear any more you may have if they come to mind.

Brian

Don't worry about asking questions here. We're all perfectly willing to spew our audio/video vomit for the most part. Monitors is kind of a shorthand way of writing that the speakers are relatively small and require stands, versus floorstanding speakers that don't and generally will produce more bass (but still not necessarily full range, and most aren't which is why subs can frequently help). You never "need" a subwoofer, but if you're doing a lot of TV and movies it greatly enhances the experience and makes it significantly more immersive and involving. When you mentioned 3.1 I assumed you were adding a sub (the sub being the 0.1 part and the 3 being the front L/R/C). Also, at your price point it's tough to find floorstanding speakers that don't commit a lot of sins that screw up the sound, and you'll still want a sub to get the full movie effect anyway. Hence the assumption you were looking for monitors, which is probably the smarter and more cost-effective way to go for many reasons.

Hope this helps, and sorry if I'm just making it more confusing.

No Soix, that's not confusing at all! Thanks very much. I get a little hesitant because I am so new to this site, and although I have some general knowledge, I'm not nearly where you guys are. I know it can be annoying to have someone hop on a site like this and ask very basic questions, but I do really appreciate all the help I've gotten so far.

Thanks again,
Brian