You want a.) a Blu-ray player and b.) a home theater system. HT systems can be packaged (aka HTIB or home theater in a box) or DIY where you assemble all parts (receiver, speakers) yourself. If you don’t know much about these things or don’t care to do the research, go wtih an HTIB. Those are almost always inferior to DIY systems, but it’s much easier for the unintiated.

You don’t want an HTIB centered around a player (i.e. DVD or Blu-ray). Such systems are very limited in their connection options and most don’t allow expansion. So what you want is a receiver-based HTIB. In my opinion the best value HTIBs (and receivers in general) are made by Onkyo. If you want one that’s HDMI compatible, start with the HT-S6100. There’s the 7100 too, which I think is just the 6100 with speaker stands and a slightly different receiver. The king of the hill is the HT-S9100THX. It meets THX’s standards for audo quality.

If you want to DIY, you’ll need to do some research. Read forums, ask questions, etc. Look for Pioneer, Yamaha, Denon, Harmon/Kardon and Onkyo receivers. For speakers you can either buy piece meal or go with packaged 5.1 sets. I am partial to Polk Audio. Just search “Polk 5.1″ on Amazon for some ideas.

As far as the Blu-ray player goes, I used to recommend the Panasonic DMP-BD35, but I think they stopped making them. Sony’s 550 and Samsung’s 2500 are good models. The new 2009 players should start coming out later in the month, so keep your eyes peeled for good deals on the 2008 models (if you can find them).

Feel free to ask questions. Good luck.

For a player, definitely go for a PS3. It’s the most future-proof player out there. It has direct-update over the internet capability. The hardware is not only top of the line, but about the same price as a standalone player, and has the added bonus of being a game machine (although games are unbelievably pricey).

For a receiver, I would say stick with Sony. Many of their receivers are built and tested with their own players. They are reasonably priced as well. However, just about any high end or medium high end brand will perform the way you want.

Well the 7.1 stems from the reciever… for that I’d recommend either Kenwood, American Acoustic or Yamaha. They are all fine reciever/speaker set ups.

As far as the blue ray player? Get a PS3!

Its the best blu ray on the market (still)… it updates automatically and gives you true 1080p with upscaling. Not to mention you get an awesome video game system and all that entails.

If the Ps3 is not your cup of tea then get a standalone Sony blue ray player. They did invent it after all.