Recommend me a 5.1 setup please

Soundbars and HTiBs (home-theater-in-a-box) will hardly ever sound good. Their main goal is simply to be better than the TV speakers. However, 3 to 4 hundred is not much of a budget for a good sounding 5.1 system. On the other hand you might get a passable 2 channel system for that much which will sound much better than a bunch of dinky satellite speakers that you get with HTiBs.

Here are some options: If you have a Fry's near you, go get two Infinity Primus p163 bookshelf speakers which are on sale right now for 108 a pair. Get a open box 5.1 receiver with the rest of your money. Save up and build your system out to a 5.1 from there based on that speaker. However, if you see the Infinity Primus p363 tower speakers on sale there for $100 each, get those. Those will give you much better bass than bookshelf speakers. The p363 are incredible tower speakers and occasionally go on sale at Fry's for $100 each, that is a steal for their performance.

If you DON'T have a Fry's nearby: I recommend getting a pair of these:
http://www.hsuresearch.com/products/hb-1.html
They have very good bass for bookshelf speakers. Go get a used receiver from ebay or craigslist to power those.

With either the Infinity speakers and receiver or the Hsu speaker speakers and receiver, you won't have any money left over for a worthwhile subwoofer- you just don't have the budget for it. If you want a sub now, this sub is basically the cheapest I can recommend:
http://www.parts-express.com/pe/showdetl.cfm?Partnumber...
There is no sub cheaper than that which won't be a boomy, muddy, one-note POS.
If you want something with deeper bass and higher fidelity, I recommend saving up for this:
http://www.hsuresearch.com/products/stf-2.html
If you have a large room, neither of those subs will do, and you will need something like this:
http://www.hsuresearch.com/products/vtf-2mk4.html
or this:
http://www.outlawaudio.com/products/lfm1plus.html
Sometimes those Outlaw subs go on pretty good sales.

The Klipsch hd500 might sound better than your soundbar, but it won't sound great and it won't do justice to your TV and blu-ray player, assuming they are actually good ones.

i have panasonics newest plasma 50 inch viera and it looks better than the samsung d7000 series which is one of the best 55 inch leds out there...the plasma looks better in every way. the bluray player is a samsung 3d bluray player, not sure the model name.

do you think it would be wise to just keep the sub and use the sound bar as the center speaker, but also purchase the extra speakers and receiver? i got this sound bar, the sub is really nice in my opinion, and the overall quality of the bar itself is good, but nothing special. Its smooth on the high end and has a nice big sound stage, but separation and such are low due to it being a bar. Can I use what I have and build a 5.1 off this? the sub is wireless though. If the bar is connected to center speaker on a receiver, will it still produce the bass via the sub the right way or is this not a wise idea

http://www.newegg.com/Product/Product.aspx?Item=N82E168...

You can use the sound bar in a 5.1 system by using it as the left and right front speakers since it is a two channel setup, but the end result would be awkward. You would use the Analogue RCA inputs on the sound bar, as this won't work with the digital inputs. The sub will work with this as well. If you wanted to build off it, you would want to buy an additional self-powered center speaker and some self-powered surround speakers. It would be awkward and furthermore, the center and sound bar would be timbre-mismatched, but if you aren't picky about sound quality, that won't be a big deal. You can also hook the sound bar to the center channel pre-amp output on a receiver that has that, but if you can afford a receiver with pre-amp outputs, you ought to be buying a better sound system to begin with.

Personally I would just start over again with the sound system.

If you just want decent, simple two channel sound, you can skip the receiver and just get some self-powered monitors like these:
http://www.sweetwater.com/c405--Active_Monitors
While they would also be not so easy to stretch into a 5.1 system, they will sound a hell of a lot better than that sound bar, guaranteed. You can hood those up to your TV just like your sound bar. To get good bass from monitors like that, look for ones with larger woofers, around the 8" diameter area, like this:
http://www.sweetwater.com/store/detail/B1031A/
Your sub wouldn't work with that setup. It looks like your sub will only work with your sound bar, sorry to say. To be sure about that, look at the back of it and tell me if there are any jacks there.

If you eventually want a good sounding 5.1 setup, the thing to do is buy a decent 5.1 receiver and some front stage speakers for a start. Then add the necessary components as you can afford them; a subwoofer, a center speaker, and surrounds. Try to have the center match the same set as your front right and left speaker. It isn't as important to have your surrounds match, and don't worry about matching your subwoofer, just get a good sub.

i was recommended the audioengine a5 or the swan M200mkiii speakers...not sure what to do except try to return this sound bar for the time being

thank you for your help