My first dedicated home theater - on a budget

[primaz]

I recommend to get the 1080 projector but do so at the price of the 720 buy buying a used one. This next year with so many great new 1080 projectors you will find a lot of people upgrading so that would be better to get someone's used projector.

I also think used is good for the electronics for certain brands. In early 2009 Outlaw Audio is putting on their new flag ship surround sound pre amp processor for $1300 and they are selling the previous model for around $699 but to go even cheaper there are a lot of people with that model and it will go for around $375-400 on Ebay. That way you do not need to settle for a reciever processor yet have separates at a bargin.