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At this price range, I think you're really shortchanging yourself by tring to go with a complete 5.1 setup or any setup that involves floorstanding speakers. Focusing on two quality bookshelf speakers will net you much better sound than trying to spread that money to cover 5 speakers. Here's one setup to consider
Receiver - Panasonic SA-XR25 $210 shipped
Speakers - JBL S26 $140 shipped
Sub - Dayton 10" $125 shipped
These are all very good components for the money and have a history of favorable reviews. Depending on your listening preferences, you may also want to look at a pair of Wharfedale Diamond 8.1 speakers instead of the JBL pair. This should leave you enough money to cover the cost of speaker wire, interconnects, etc. Inexpensive DVD players are a dime a dozen so pick whatever suits you.
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