Question about setting up a sound system

[jq71586]

Ok, before I get into my question. Yes, I am a complete noob when it comes to this stuff and if you are going to poke fun of me, you can, as long as you help out in your post as well.

Ok. So I have a 21" 1080i HDTV. I have a 60 GB PS3 as my BD player.

I have a pair of component cables. One going from PS3 to the tv and one going from cable box to the TV. My tv has no HDMI slots.

I'm interested in getting something somewhat resembling a surround sound system. The low end something in the range of 100-200 dollars. I obviously know I can't afford a 7.1 lossless set of speakers but something to spice up the room a bit.

My question. I hear that the sound is better if you run it through HDMI. Is that possible since my TV doesn't have HDMI? Will it work if I run an HDMI cable from my PS3 to the receiver.

Let's say I can't would it be worth it to spend let's say 150 on a 5.1 system not using HDMI? Is the sound that much better coming from a non-HDMI reciever to upgrade over what is coming out of my tv?