Yamaha YHT-165S
If you already have a decent DVD player and are keen to move into proper home theatre territory, then Yamaha's YHT-165S home theatre kit could be a good option.
Upside
The YHT-165S sits at the low end of the new range, with its receiver essentially the same model as Yamaha's stand alone RX-V357B (except it's only available in silver, as opposed to the RX-V357B's black). The receiver drives a 5.1 system with a total power output of 500W (100W x 5), and can decode Dolby Digital/Matrix 6.1, DTS/Matrix 6.1 and Dolby Pro Logic II. The receiver features a decent, if not exhaustive, list of inputs and outputs. Leading the charge are two component inputs (with one component out), which means you can feed it with the highest quality analog signal from two sources. It has two optical audio inputs, one digital coaxial audio, four composite AV inputs, two audio inputs and one AV/audio output.
The YHT-165S's six speakers (one centre, two front surrounds, two rear surrounds and a subwoofer) share the same silver styling as the receiver, and are quite compact. Both the centre and satellite speakers feature dual 5cm full range drivers, with the sub having a 16cm multi range driver. Total system frequency response is 30Hz to 25kHz.
Downside
Overall