Home Theater vs Hi Fi ~$500

I'm moving into a new place and I'm starting from scratch on everything. Meaning, I need everything. I'm on a limited budget though. I'm looking at spending around $900-1000 on the TV and hopefully less than $500 on the rest. I'm getting really stuck on what to do about the DVD/audio/receiver side of things. As soon as you start looking at anything hi-fi your minimum price gets around $500 and that doesn't even include the DVD player or cables or anything. So I'm wondering what I really need.

I'm primarily using this for movies and music. I know that for music, hi-fi is way better, but again its a balance of price and performance. I guess examples of what I'm currently looking at could be...

Home Theater:

Hi-fi Home Theater:

With the Hi-fi one I'd have to throw in a $100 blu ray player too, so that ups the cost. I'm pretty lost on this home theater stuff, so any advice is really appreciated.

P.S. I'm in Australia, so stuff is a lot more expensive than in the states.
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  1. Try something like this
    You can upgrade the speakers later which the other prepacked systems will not let you do.
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