Thanks for the detailed write up. I'll probably come back to you little later since I'm not clear on what exactly I want to buy
I'll elaborate whatever little I know about my HT. I have a 2.1 setup consisting of a Denon 1909 AVR driving a pair of Wharfedale Diamond 9.6 tower speakers and an active Subwoofer SW150. I went for a decent setup on the sound front before I thought I needed the TV.
To my inexperienced ears I find that these speakers are good with considerable bass (and I mean, considerable) of their own, but I wanted that seat to shake in the odd (Transformers) movie, so I went ahead and bought the sub. Some of my music is not HD content (read, its mp3) so the sub is not even throwing out anything.
The AVR and the Tower deals that I was getting were temptingly attractive (or maybe I was foolishly impatient), so for the price I paid, I am happy. While I am sure their are better speakers out there (I certainly want to hear the RS6), this combination sounds musical, involving, and detailed enough to my untrained ears. But honestly I may have taken a slightly different route today, which is thus: if one is going to buy the sub anyway, you could look to buy a pair of good bookshelves (15-20k range) and an AVR. (I found the Wharfedale Diamond 10 series better than the 9 series, so the 10.1 was better than 9.2 and so on). And then later when one has the 'ears' and the money, buy the towers, and use the bookshelves as surrounds. I for one am still debating the center channel, and till then using the TVs own speakers fill in the center!
Many aficionados argue in favour of a dedicated two channel amp over the AVR, because for the same price point the amp has better circuitry than an AVR. But that is a choice one makes only when your requirement of listening to music has far higher priority than the visuals. Mine wasn't so clear cut. So while I may never buy the surrounds, though my avr is a 7.1, but having the capabilities that an AVR offers at hand was a must for me. This is not to say that AVRs are not good. I bought the Denon after reading a smattering of reviews giving it a high rating in the music capabilities. However, I was (and am) a novice in this field.
I am sure you will find many threads and posts, particularly those written by Venkat (mbr, dinyaar, and so many others) to be far more informative. There is however one advice that I took to heart, which was: 'Let your ears decide'. No matter how lucidly the sound is described in words, it can never match up to an actual audition. And your ears can disagree with others! I was lucky to join an audition of Viren's Tube amps pitched against SS amps that people brought and I did note that some of my (mental) notes did not match with what others were saying.
I'll also take the opportunity to add a little about the other stuff I bought later (though you have started a separate thread elsewhere). When I bought the Pio 410 dvd player, I wasn't really aware of the media players available. Now having got the WDTV I don't use the DVD player at all, except for the odd movies. I converted all of my favourite music for which I had CDs, into flac. So no more physical changing of disks and you can play tracks as per your choice/playlists. The music CDs too stay less prone to scratches and wear and tear. I wish WDTV had a nimbler menu navigation and wifi capability (which BTW can be hacked). The 'WDTV live' has it built in. One can use the laptop to drive the visuals and the sound, but they do not have a remote! In short If you don't watch too many movies, then use your laptop, and buy the media player for all your music.
I've little else to add, but feel free to come and have look at my system if you ever visit Delhi.