that sounds a little crazy. when i clicked on the Home theater section on Bestbuy's website, there were maybe 20 systems under 500.
you cant possibly imply that they are all garbage, there must be something decent in there.
Yeah, they pretty much are. I did a ton of research about a year ago when I wanted to FINALLY get a decent sound system. I looked at some sound bars and honestly, they seem like a decent upgrade over tv speakers as long as you're not expecting actual surround sound. As much as they claim it has "virtual surround sound" or "simulated" or whatever, it just ain't the same and might not even work depending on the shape of your room.
Anyways, after doing a TON of research and reading a crapload of reviews I eventually settled on Energy Take Classic 5.1:
http://reviews.cnet.com/surround-speaker-systems/energy-take-classic-5/4505-7868_7-33310963.html
And for a receiver:
Danon AVR-1912
http://reviews.cnet.com/av-receivers/denon-avr-1912/4505-6466_7-34647681.html
Both were one of the highest rated products at their respective price points but this was a year ago so there might be better products now. Got both for $1000 + Tax at Future Shop on sale. This is considered an "Entry level" or "budget" setup. If you want a higher end system you're looking at $500+ PER SPEAKER!
EDIT: Here is another set of speakers I was considering:
http://reviews.cnet.com/surround-speaker-systems/pioneer-sp-pk21bs/4505-7868_7-34654855.html
EDIT2:
They have a similar deal on now as what I got but with a slightly updated version of the receiver and it costs $100 more. I would still say this is one of the best bundles you can get for the price:
http://www.futureshop.ca/en-CA/product/-/b0000712.aspx?path=8599e4cd879c985542fb1efe60fc733ben02
But it's more than twice OP's budget.
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