Someone asked me recently to describe my home theatre. I've put quite a lot of thought & work into it. But not a lot of money. My goal from the start was to achieve the maximum return with the minimum of complexity.
So, right from the start I knew that it was going to be as much digital as possible. I don't care about live TV and I'm a bittorrent expert so I knew I wouldn't have to mess around with cable connections. But more to the point, being digital means you don't have to worry about analog components or duplication. For example, you can concentrate on having just a single Digital/Analog Converter (DAC)... a key component in your audio set-up.
The first thing I bought was the DAC & speakers. I had a new apartment and I wanted to be able to listen to music there. In particular, I wanted to be able to do two things: listen to music coming off my Nokia N95, which functions like an iPod, and listen to music coming off my laptop, a MacBook Pro. I did a lot of research online to figure out how I could get the best sound with a budget of $400. And I wound up finding a REALLY nice pair of speakers.
I actually restricted my search strictly to powered speakers, or, as they are commonly called, "ipod speakers"... and most of them are fairly crap. Even the ones from Apple didn't really score that well when I listened to them. I'm a musician on the side and I know what good sounds like. None of the ones I could find in stores reproduced sound the way I wanted -- clean, like the original, faithful. They were bass heavy and muddy. But online I read a review of AudioEngine 5, a pair of "ipod speakers" that got fabulous reviews -- from audiophiles.
You probably know that audiophiles are nutcases, but there is something to be said for their discrimination and knowledge of the art. If an audiophile says something is good, then it probably rocks if you're a normal person, even a musician like me. So, I found a deal and bought the A5s for $350. And I picked up an Apple Airport Express at the same time.
Both purchases turned out better the more I learned. The A5s have built-in amplifiers, which means that I don't need to (a) buy an amp (which I planned) or (b) match the amp to the speakers. That's a relief because sound matching amp/speakers would be a LOT of work. With the Airport Express, I started to notice something odd. When I plugged my MBP directly into the speakers, it sounded OK. But when I played through the Express, it sounded GREAT. Turns out the Express has a quite good DAC inside. Sweet! The improvement is highly audible.
OK, a little digression here about speakers. Most products, you get what you pay for. Not with speakers. Speakers are in fact somehow immune to the whole mass production economics. Most audiophiles seem to agree that most, or perhaps all, consumer grade speakers are absolute shit. To get good speakers you either spend absolutely boatloads of money, buy second-hand, or ... you can buy from very small companies, even individual crafters. Audioengine falls into the last category. Even though their website may look slick, this is a small enthusiast company that just wants to make great speakers.
What's up with that? I don't know. I think partly it's the analog ecosystem. For good analog components you just cannot avoid spending a lot of money on expensive electronics to put inside. You can't skimp or replace things with digital. You have to have huge capacitors, big transistors, lots of coiled wire, heavy metal. Good speakers are HEAVY. They are made not from plastic or even titanium but MDF -- that's plywood in normal english. You can't fake this stuff, you have to have it, but it's not rocket science, just good workmanship. So, buying from a small company like Audioengine is not silly, it's a great choice. End of digression.
So... now I had a REALLY good sound system and spent countless hours discovering all kinds of wonderful things about my music collection. It really makes a difference. In fact, I admit that I've poisoned my ears on lesser systems... I just need to hear the higher quality. The music is just ... better. There's more in it, detail wise, spatially, musically, tonally. Get a good pair of speakers & DAC, and you too can discover the magic.
Next up: TV. Starting out, I thought I wanted the biggest plasma I could buy. I read all of the reviews, the dark room tests, HD movies, the works. Plasma is the best, blah blah blah. Went to a big store and suddenly I realized different. Two things for me. One: I'm only about 8 feet from my screen and I don't want to be dwarfed. So, I can knock down the screen size dramatically, in fact, I went down to 32 inches. Crazy eh? Second: I have a sunny upper-floor viewing room with a window directly opposite the display, and I intend to watch during the day. That means matte screen which means LCD. Benefits are that I save money due to the small size, don't have to worry about burn in or wasting power, and I know what LCDs are like from long experience. So I wound up with the Sharp AQUOS 32D64U. This model has 1080p, which was essential for me. I have to be future proof. It's going to be a long time before there's a higher resolution than that for films.
Finally, I need something to tie it all together, and here my Mac bias definitely played a role. Mac Mini of course. Of course it helps that they are silent, small, and look very good indeed. No ugly boxes for me. I run VLC and mplayer, but mainly Plex, and awesome port of XBMC. Video goes through a DVI to HDMI converter into the TV, and sound goes analog into the speakers (A5's have two inputs). My only complaint is again, the Mini's analog audio output is not as good as the Airport Express. Eventually I will have to buy a dedicated DAC.
This setup does everything I need, and it's got a good future. If and when I want to move up to new components, all of these pieces will make excellent secondary system components for a second room. They all go together really well, look good, and look and sound great. All told the whole system was about $2K which is a reasonable price considering that I'm basically completely satisfied at this point in time.
For the future? I might -- might -- try out surround sound at some point. I'm not crazy about -- pointless for music, but for the movies -- maybe. I definitely don't need a bigger screen. A proper external DAC, driven by USB port, is probably the next item to get, and then I would begin the search for a new amp/speaker combo. Realistically though I can't upgrade my speakers (or add a sub-woofer) until I move into a house. My apartment does not have thick walls and with the A5 bookshelf-sized speakers I can crank it up any time without waking people up.
So, there you have it... complete system, as digital as it can get, and in the $2K range. I'm happy.