Best HT starter system?

Not sure if I'm posting this in the right place. I'm a newbie, so please excuse me if i do anything incorrectly here.

I'm trying to begin putting together a Home Theater system. At this point in time I only have about $750 to $800 to invest. I have a sub, and a pair of junk Yamaha bookshelf speakers. From my research so far, I'm thinking that I'd like to spend this $750 to $800 on a HT receiver and an pair of good speakers to use up front. Eventually I can add more, but I thought this would be a good starting point. I plan on using front speakers and receiver for music almost as much, or more, than I use it for Home Theater purposes.

Does anyone have any recommendations? The last time I owned any "quality" audio equipment was 15 years ago, so I know very little about HT receivers, etc. Basically, I'm asking for suggestions for a pair of up fronts, and a receiver for $800 or less, that would be a could system for music initially, and could be built into a good HT system. If it makes a difference, the room this system will be used in is roughly 15x20 with cathedral ceilings.

Thank you very much in advance for any suggestions.
Thanks for all the help!

As far as the component switching, I have a new Sony Bravia 46' LCD, and do all of my switching there, so it's not an issue. That being said, should I consider an older HT receiver (more bang for the buck)?

Also, I was considering the DM603's for the front and eventually building that into a full system w/ the 601's, etc.
Good idea or not?
Hi Loki.

Several years back, I put together a 5.1 system for my ex-wife: 603s up front and 601s in the rear. They were driven by a Yamaha 100w x 5 avr. This was in a room a little smaller than yours. The B&Ws are excelent. Problem is, I don't think there is a matching center channel speaker. I used a large Polk center which does okay w/ the 603s.

For a receiver, you might look for a used Onkyo 605 or, much better, an 805.

if i had $750 to spend, and planned to switch video directly thru the tv, i'd get on ebay with the view to the following:
1. $150-200 or so for an older 5.1 or receiver; i'm partial to integra and marantz;
2. $50-100 for a denon dvd-2800 or integra dvd player, both great sounding units, albeit without the latest video upconversion;
3. $300 for bookshelf speakers, either energy (C-1 or C-3) or psb (maybe alpha or image series). the idea would be to add floorstanders (or additional bookshelves) and centers as budget permitted, then use the bookshelves as rears. both these brands are great sounding and easy to match;
4. $100-150 or so for a 100w subwoofer from a quality mfr. (e.g. energy, mirage, paradigm).
5. with whatever pocketchange i'd buy modest cables from ar, blue jean, etc. partsexpress, for example, is blowing out perfectly good belkin cables for next to nuthin.