Our budget setup:

Samsung LA32S71B (32" LCD TV)
Pioneer DV-696DV-S (with HDMI 720p/1080i upscaler)
Yamaha RX-V457
Wharfedale 9.2 Front
Wharfedale 9.CS Center
Wharfedale 9.DFS Rear Surround
US Audio US-512-D Subwoofer