Home audio is one of those gadget categories where prices can range anywhere from $250 to $25,000. It also has a range of subcategories and mind-boggling terminology. So we thought we'd provide a quick and easy overview for shoppers who are just interested in getting the most for their money--especially at the lower end of the price scale.
First off, identify your audio and video needs. If you've already got a video source you're happy with--a Blu-ray player, game console, or DVD player--then you'll want to go with a component-based home theater package (a receiver/amp plus speakers) or you'll want to put together your own home theater system (an AV receiver plus speaker system). However, if you're starting from scratch--you're ready to start fresh with Blu-ray or a new DVD player--you'll want to consider a Blu-ray home theater system. For 2009, such all-in-one systems start at $500.
Secondly, stick to 5.1 or less. For true surround, you'll need at least a 5.1-channel system (five speakers plus a subwoofer). There are also 6.1 and 7.1 configurations, but they're overkill for anybody but purists. Of course, all those speakers means a lot of cables and placement questions (speaker stands, commandeering bookshelf space, going for wallmounts, and so forth). For a lot of people, it's more trouble than it's worth. There's nothing wrong with opting for a stereo or "virtual surround" speaker configuration. There are several options--everything from a single speakerbar that mounts under the TV to 2.1 or 3.1 configurations. You'll lose the true surround effect, but you'll also ditch the front-to-back wiring. Bottom line: spending your money for two good stereo speakers instead of a so-so surround package is a worthwhile trade-off.
Remember, don't overpay for sound quality you can't hear. Prices for speakers, receivers, and home theater systems can easily spiral into four figures or more. What's the difference between a $500 audio system and one that costs $3,500? For the so-called "golden eared" set, the sonic improvement they'd get from the latter configuration is well worth the premium. For many others, that difference may well be negligible. Even the most experienced audiophiles will struggle to hear the difference between Blu-ray's Dolby TrueHD and DTS-HD Master Audio soundtracks versus their standard DVD counterparts. A good rule of thumb: if you can't hear the difference between MP3 (or other digital music files) and CDs, then you're not a particularly discriminating listener; mass-market budget audio gear will be fine for you. If you're a stickler for sound quality--you prefer vinyl LPs, SACDs, uncompressed Blu-ray soundtracks, and the like--you're going to want to go for the higher end of the spectrum.
That latter crowd should definitely consider going modular for their home audio purchases. That means leaving the all-in-one home-theater-in-a-box systems (HTIBs) to the MP3 crowd, and going with full components. For the mainstream, that means an AV receiver paired with a dedicated speaker system (be it surround, speakerbar, stereo, or whatever you prefer). It's pricier, to be sure, but it need not require taking out a second mortgage. There are some excellent receivers available for less than $500, and they can be paired with similarly priced speaker systems for a sub-$1,000 audio system that'll blow away nearly any HTIB. And this modular approach means you can then upgrade the speakers and/or receiver a few years down the road, if you're so inclined.
To that end, remember that the key to home audio is investing for the long term. You may be used to upgrading your cell phone or laptop every few years, but a good speaker system can reasonably be expected to last for a decade, if not longer. Paying more up-front for a quality system could actually save you money down the road. So don't be surprised if your new speakers outlive your flat-screen TV, even if they cost the same amount.
A last bit of advice: opt for cheap cables. We've found the digital, analog, and speaker cables available at online retailers such as Monoprice to deliver basically identical performance to name-brand cables, but at a fraction of the price.