For the money, Best set up for HT and music


I have been reading for about a year; about all the different equipment you can buy to make the sound be the best it can be. I know it sounds extreme, but I want a good starter that I can build on.
He is my history (you can skip this if you like I'll put separator in front of my question)
I'm not super rich, but I do have a crazy love for music, unfortunately I'm young and haven't had enough time to build wealth to build on this hobby. Originally I was looking for the best surround sound (5.1, 7.1) for music and home theater. I came to the conclusion after a while that the Denon 2808ci would provide exactly what I wanted and give me room to grow in the future. I figured with this receiver I could pair it up with KEF 3007 5.1 speakers. I then found that, this might not be ideal. I have picked and matched other speakers and receivers, but at this point I've read so much I've become lost. So if anyone could help it would be much obliged.
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In my (short story above if you didn't read) I originally picked the Denon 2808ci for my receiver and KEF 3007 5.1 speaker system. From what I've read though, a 2.1/3.1 might best fit my needs though for now; while optimizing my money.

What would be the best set up for 4500 or less for a nice sounding home theater and music combo. It seems seems 2 speakers, with a center and a sub would optimize the sound quality; but then others say the center won't be needed for the stage if you position the two speakers correctly.

Sorry for the epic writing, but your help would greatly be appreciated, if you need any other details I'll gladly post. By the way, the living room is 18x18; unfortunately wood floors, but I suppose I could get an area rug.

Thanks so much in advance for your help and again sorry for the epic read.
bluvision
Don't be afraid to go used on your equipment.

Last year's Denon AVR 2807 are selling used for around $325.00 That's over $700 off list from just one year ago. The only real difference between that and the 2808ci is that the 2808 has HDMI 1.3 which will decode the HD Blu-Ray audio. With the 2807 your player will have to do the decoding.

Denon 2900 universal players sell all day for around $100-$150.

This leaves lot's of money for other things such as a blu-ray player, maybe a display.

Heck, you could squeeze a dirtbike in there :)
I would go for a 38XX or 58XX Denon receiver if going for used all in one box. These will do much better with 2 channel than 28XX due to greater power/current.

Given that Bluvision has a 46" Samsung, I would guess they want something that upscales DVD to 1080p effectively. Old Denon DVD players wont do that. If using computer for music source, then I would go for Oppo 981HD - 1080p up-converting with Faroudja video processor for $229. Another option is a Toshiba HD DVD player which are available at fire sale prices and do a great job at up-converting as well.
If you do go used don't get an outdated surround proccessor. Make sure it does the latest surround formats and has room eq. The Denon you are looking at would definately fit the bill but with your budget I would go with a new 3808 and go used on the speakers.

As for the source, the Oppo's do a great job if you use the digital output and let the receiver do the digital to anolog conversion. As for bluray, the PS3 is the best deal out there performance and price wise at the moment.
I would think twice on Room EQ many units I suspect would be affordable do nothing more than can be done in 15 minutes and a knowledge of your speakers so its fluff that offers no real value after you set it up....and may come at a premium in price for percieved value.
Room treatments and speaker placement are always the best place to start but I would not completely discount room eq. Seems as if ALL the new receivers have it and many people are getting good results, especially taming bass peaks.