Help me choose a new setup please :) Need advice

[Higgs1]

I'm not a huge audiophile but do like to have nice equipment. I'm currently running an old Sony 1000w home theater in a box jobbies from walmart from about 5 years ago (no hdmi, no HD audio, basic 5.1).

I've been looking around at more Home theaters in boxes (just because Idk which speakers would be best with which receiver, etc) and find it alot easier just buying a whole setup. I did come across this nice Onkyo setup on amazon and was wondering if I could get some opinions and suggestions.

the equipment I'd be using it with is the following:
Sony PS3 (original 60gb launch unit if it makes a difference) via HDMI + Optical
Xbox 360 (launch unit w/o HDMI) via VGA + Optical
High Def Comcast (Motorola) DVR via HDMI +Optical
Samsung 1080p 61" DLP


here is the system i was looking at on amazon for $670 Onkyo HT-S7200

I have a rather large collection of blu ray movies & would really like to start hearing the benefits of Master audio that they come with, I can obviously see the Hi-Def difference in a 1080p picture, but would now like to hear it too, I honestly don't know what i've been missing by listening on a low end 5.1 but i'm hoping a nice 7.1 will blow me away.

I'd like to keep my budget as low as possible so if you have any recommendations please feel free to either reply here or send me a PM.

Any and all help is greatly appreciated. I really like learning about new tech and i've never really grasped the audio side of the whole home theater experience, way more of a videophile myself lol.

also for reference the room it is in is about a 20 x 15 if that matters & i have my 4 satellite speakers mounted in the corners of the room with the center under my TV and sub next to the tv on the ground.

thanks again & look forward to reading everyone's advice