Wow--has this been an experience. I haven't thought about home-theater in YEARS; and I haven't thought about commercial (non-DIY) audio stuff for even longer.

The guy's post about getting Magnepans is excellent. I'm actually a little ashamed that I didn't think about it myself. My own system has a pair of Acoustat 2+2s, which are electrostatic speakers. (Think vast amounts of voltage being passed through 24 square-feet of saran-wrap per-speaker. This drastically increases volume displacement, thereby producing better sound.) Magnepan uses a similar technology, albeit it's much safer because it's sans the high-voltage transformer. (I have to put a fence around mine to keep Ella out.)

I would really give these Magnepans a look. Traditional monkey coffins are (by their design) limited. Not bad, just limited. Magnepans really offer some neat advantages, because of their innovative design. I would call Audio Consultants to schedule an audition. Ask if they stock the MMG or the MMGW & MMGC home theater system. You can also order these factory direct for an in-home trial. (MMGC is the center channel; MMGW are the front/rears. The MMG is a for two-channel, but would make a great set of front L/R. You'll also need to reserve money in your budget for a sub--so take that into account.)

And if you're not interested--then click on the BBS thread listed below for some suggestions. Mirage, Orb Audio, Paradigm, Energy, Definitive are all great brands. I'd also throw in Klipsch, if you don't mind the bookshelf form factor. Boston Acoustics may also be worth a look. I'd look to probably spend between 1k and 1,200; and given that the HDMI spec won't be finalized until the HD-DVD wars are over, might as well go down a model on the Yamaha receiver (per Dirk on the board). Again--read that BBS thread; it's a wealth of info.