First, as many have already said, don't go for the HTIB.
Second, I can provide some info on my setup that could work well for you if you don't mind getting your hands dirty. It's not as good as my dad's HarmanKardon/Klipsch Reference series (w/2000 watt sub!) system, but beats the pants of his Bose lifestyle system.
-First, go to ebay and find a Soundblaster Extigy 5.1 sound card for $50. They don't make them anymore, so if you want something new and under warranty you'll have to go for an audigy2 nx ($100).
-On ebay, find a Klipsch Promedia 2.1 system, you can find them for about $100 w/shipping. Great THX certified system.
-Find a promedia 2.1 sub/control unit ONLY (no satelite speakers). If you can find one, they go for about $60. Make sure it comes with the volume control pod. Alternatively, buy the whole 2.1 system, take the pod off the satellite, and ebay the satellites.
-Find some Polk bookshelf speakers on ebay. Polk is a good one to look for because it's not as popular as some other brands so they command less on ebay, but they sound awesome (much better than the klipsch satellites). I picked up some R15 speakers for $30/pair. Really crisp and clear sound. Come to think of it, you could buy four of these and do away with the klipsch satellites completely. I kept them (Klipsch) in the back since I don't really pick up on little details in the back anyway.
-I dug up a Klipsch SWS sub that I had from a few years ago to add to the setup. They don't make them anymore and I can't find any more on eBay, so you're outta luck there unless you can find one somewhere. AWESOME sub, really deep bass. I paid $300 new.
-Finally, pick up some optical toslink cables. I don't remember how much they are. A little spendy but not crazy. These will carry the 5.1 signal from the console. Also, get some speaker cable with no connectors on one end, and pins on the other (the lower the wire gage, thicker cable, the better). You may have to buy the pins separately and install them or if you bought the full second 2.1 system cut the mini-jack end of the wire and strip the ends.
So basically connect the optical cable from the console to the extigy. Connect the Promedia 2.1 system to the rear speaker output. Connect the Promedia Sub-only to the front speaker output. Connect the Polk speakers directly to the speaker output on the Promedia sub (it won't blow out the speakers, they match pretty well). Finally, if you get a SWS sub, you have to connect the front speaker output of the extigy into the SWS, then from the SWS to the Promedia (Extigy---->SWS---->Promedia).
When all is said and done you'll have a THX certified, 4.2 system (4.3 with the SWS sub) that sounds amazing for the price. I haven't added a center channel for 5 channel sound, but I care more about music than movies/games so I don't really need it. With your budget you can easily add a center channel and the extigy supports it. Finally, you can connect the extigy to your computer to mess around with the equalizer settings. It doesn't have to be plugged in to function though. I just used my laptop to set up the equalizer and balance, then unplugged it and it's set. Hope this helps.
Summary:
- THX Certified 4.2 or 4.3 Channel (easily upgraded to 5.3 channel)
- About $270 with cables ($570 with additional sub)
- 500Watts RMS, about 1300 Watts peak power (With these efficient horn speakers, it's bona-fide 500Watts. It's LOUD. I can't stand more than about 1/3 volume before ear pain sours the experience or stuff starts falling from shelves :) )
- Sounds way better than any HTIB or logitech PC speaker junk.
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