SVS Speakers or Something Else? Absolutely Newbie.

AV receivers are the best buys in audio nowadays, short of going fully active monitor.

Since you are on Agon, I think you are aware that buying used will save you lots of money through depreciation- kind of like buying a new car vs. a used one.
That being said, a pair of Vandersteen VSM or bookshelf speakers or even a pair of Vandy 1's would be in your price range. As far as sound goes, Vandersteen speakers are about as good as you can get for the money. I know that sounds trite, but after 30 years, I have heard many speakers and the Vandy's give the best bang for the buck.
As far as amp/preamp goes, I would suggest either a McCormack micro amp and preamp or go with an Adcom like the GFA-555 and matching preamp. They can be found used for not much money, but will give you a heck of a sound stage.

" AV receivers are the best buys in audio nowadays, short of going fully active monitor."

Just because something's cheap, doesn't mean its better. When was the last time you heard someone upgrade from a receiver to separates and say they weren't happy with the results? You get what you pay for.

As for powered speakers, I've owned many pairs and found them to be overpriced for the level of sound quality they deliver. As a matter of fact, I just gave away a brand new pair of Tannoy Reveal 502's. 

" A $500 receiver can easily pump out 500 watts total."

There's not a receiver on the market that can even come remotely close to putting out a clean 500 watts. 

You may want to rethink your approach to audio. You can't get your listening experience from reading magazine reviews and spec sheets. (There's no reason to reply to this post. I already know that absolutely nothing will change your mind, and I know what your counter argument will be. I won't be sucked into yet another senseless debate. The info in my post is for the OP. Its stuff that he may find useful).

tls49: thanks for reminding. After some research I realized the same thing and I got some Belden 1694A RG6 cables for RCA connection to the subwoofer. Don't think I can go wrong with that cable - the feel is very solid, much better than the cheap RG6 available at some local store.