Hi Joe. Welcome to HTF!
I'll try and answer some of your questions, but many of them are topics unto themselves.
2. 1080p vs. 1080i vs. 720p Most of the current models are 1080 compatible. You can save money by getting a year or two old model that only supports 720. I dont think you would notice any quality difference as many of the sources (CATV box, Antenna) are 720.
3. Home theater... How do wireless rear speakers work?
Poorly and expensive.
4. What are some quality, inexpensive cables for making everything work?
For speaker wire - good oxygen-free 12 ga speaker wire by Carol can be found at your local home depot, or spools of it from
www.partsexpress.com
For interconnects, best value are custom sites like:
www.bluejeanscables.com - the owner is a member and has many happy customers here.
5. Are the extended warranty programs worth the money?
Generally - no.
7. As far as HDMI outlets on a TV, if I want to run everything (DVD, Video Game System) through the home theater. Do I have to have more than one HDMI port on the actually TV or just one to hook it up to the home theater system?
Well - a typical receiver has 2 inputs and a TV typically has 2 so this gives you a max of 3 HDMI devices.
Generally - run your high-def sources to the TV, but also run audio straight to the receiver. This tends to let you do casual watching with just the TV speakers, but you fire up the surround sound receiver for more serious movie or game playing.
8. What are some tricks of the trade ..
Buy a spool of 12 ga and run the wires along the floor. You are a student - dont worry about the decorator aspects unless you have a picky spouse.
9. With the 360...
Thats a topic unto itself. Go with the Elite version because of the bigger hard-drive. Try to make sure you have a direct internet connection behind the box for XBox Live and HD movie download. Yes, the xbox will play ordinary DVD's.
Other Advice:
Ok, Go to Best Buy and buy the Denon HTIB for about $699 (perhaps cheaper now). It will include the DVD player (hdmi and up-converting) a receiver (up-converts analog to HDMI). 5 matched speakers and a sub. That leaves you $1300 for TV and cables.
I have been seeing used 42" DLP televisions for about $500 on places like Craigslist. Since you are a gamer, I'd stick with LCD or DLP technology to avoid burn-in issues. Stick with Samsung, Sony, Hitachi, LG as brands.
There is a LOT of fun stuff to do with setting up the sound system and calibrating the TV - but dont worry about this until you get the apartment and purchase the equipment.
Check with us before you buy anything. Avoid anything with 'Digital', 'Turbo', 'sonic', 'laser', 'DaVinci', or 'Pro' on the speaker/electronics. There is a lot of white-van scam stuff out there.
White Van: Guy pulls up to you at a gas station and starts a story about needing to get rid of over-stock HT equipment. Packaging looks good - but the stuff is worth about $50 total. They even have a website for the stuff - full of phony awards and "Certified" labels.