Starting small home theater, need advice


First of all, let me apologize for my lack of knowledge. I have been reading on this site, and realize how much I don't know! So, from a newbie, my apologies.

Now for the question. I've been contemplating installing a VERY mild home theater in my small(ish) family room. (prob 15 x 20). The TV is about 10 ft from the couch, and the speakers would go alongside the TV. I'm looking at a 3.1 channel setup for now, run by a multichannel receiver, with the capability of expanding to 5.1 later. I'd like to spend around $1,000 on the setup as a whole. The primary use for the system would be TV sound (80%), movie (5%) and music (15%). In my opinion, the money is best spent on quality used equipment, rather than on a "system in a box".

My biggest question is: What brands of receiver/speakers/subwoofers should I be looking for, that combine good quality with affordability? I've been looking at the Denon/B&W range, but this may be out of my price range. I assume Denon/Harmon Kardon/Paradigm/Definitive Audio are all good. But honestly, I have little/no experience with these brands. Am I relegated to the big box stores with this price range?

I realize this is like asking a Ferrari mechanic on advice to do an oil change, but I come to you knowing the collective knowledge you all possess. Thanks in advance for all your advice.

Brian
bminchen
My suggested alternative was based in part on the estimated use percentages originally given.

Also, I know that blu-ray and 1080p content is increasing, but isn't it still a small portion of the overall content?
I have to agree with pgawan, HDMI will offer little to nothing in the way of sound quality for 95% of your listening. For that 5% of disc based movie watching will be Blu-Ray based? If your area is anything like mine, every brick and mortar movie rental shop closed their doors in the last couple years. Meaning, if you're a Blu-Ray fan, you're buying movies.

HDMI's main benefit is thwarting piracy for content distributors. Like Blu-Ray, it won't be around forever. Save the money, by picking up a receiver with a good reputation and digital inputs. You'll lose nothing in the audio realm.
I'm a blu ray fan, and I don't have to buy them. blu ray is readily available at any number of mail-only outlets. high definition video and audio is here to stay, it isn't going anywhere. If you haven't gotten on the wagon, and don't intend to, well, OK.
I rent Blu-rays all the time from Redbox, can't beat the convenience and at $1.50 each, very cost effective. Use the iphone app and it's easy to find and reserve a title. They often run specials for free or discounted rentals.
Is there a current push to have higher quality audio broadcast on HD channels? Or is that not really important because of the increased cost and bandwidth associated with it? And probably the few people that would actually take advantage of it....

I will say, the Onkyo receiver that Realremo suggested does have the internet capability, and the Android app for playing music through a smartphone/tablet. I do really like that....