Hi Mark.
Let me give you some general advice.
1. You dont need big speakers or tons of power for a HT system.
People with music systems want to have 2 speakers sound like a concert hall. With a HT system you use an an array of 5-6 speakers all focused on a couch or a couch-chair combination. You dont care how it sounds in the corners or the next room. You just want good, clean sound that does not over-power the listeners in a small area.
This is why many $500 systems can sound so great. They use inexpensive, but tone-matched speakers in a circle.
2. Seating height:
I dont believe you want your audience to strain their necks by looking upwards (unless you slant your seats back). In general - lower is better. You want the bulk of the display area just below horizontal for your eyes while seated.
3. Seating Distance:
Use this
Viewing Distance Calculator to help decide how far back to put the couch. For your 46" television - a seating distance of 5-6 feet would be better than your 8 foot you mentioned. This will make your 'Theater' side smaller and more intimate, and give more room for the computer and game area.
4. Home Theaters in a Box
These can be GREAT systems. But you want to make sure you can swap out the pieces in the future as your money/interest improves. While the all-in-one HT systems look nice, small and the spouse will like it, they have a big flaw: no expandablity.
Here is what to look for:
- Multiple coaxial-digital and optical inputs
- A self-powered subwoofer
- Normal sized speaker connections
- A separate DVD player
As Wayne said above - the subwoofer is THE thing for Home Theater. But I would suggest you target about $500 for a HTIB including a inexpensive sub, then in a few months, sink the money you saved into a $600 or so subwoofer. It does sound like the "tail-wagging-the-dog" in terms of the budget, but the subwoofer is a very-big tail.
5. Decide how much time you want to invest.
That's right - time. You CAN go out and buy the above Onkyo system and be done with it. Or - study a bit, learn the names and shop the used sites or your local stores and slowly put together a piece-meal system that can sound great.
Here is what I did for my parents home:
- Yamaha 793 reciever (~200 used)
- 5 Miller and Kressle bookshelf speakers ($47 ea at a scratch and dent sale): $250
- A Home Theater Direct subwoofer $150 bought used via the internet
This little $600 system sounds very very good. It has quality components - older - but good.
But to do this will take some of your time to read this site, study and put the parts together over the next few months. This makes Home Theater a HOBBY - not just something you have.
It's your choice. Take our advice and buy a box system (and we will help you set it up properly to get a great HT experience). Or cruse this site, study, and put the pieces together yourself.
Just let us know how much time you have or want to invest. We can help you either way.