A home theater is a dedicated space in which to enjoy audio and video. From there, the definition becomes far more personal, so to help you make the right choices, you need to ask three questions:
1. What do you want?
What are you planning to watch in your home theater? "Lost?" Sports programs? The latest feature films? And do you intend to watch any of the above in standard quality (the easier, more affordable choice) or in high-definition, which delivers sharper pictures and enhanced sound?
Either way, you will need a display (a standard or high-definition television); a source component (such as a DVD player, Blu-ray player, or digital video recorder, such as TiVo); and a sound system (which can include an audio/video receiver connected to multiple loudspeakers). Once you figure out what precisely you intend to achieve in your home theater, you're ready to do inventory.
2. What do you have?
Let's assume that at the very least you have a sufficiently large TV, and you are pleased with its performance. Thanks to the triumph of DVD in the late '90s, the home-theater-in-a-box or "HTiB" category of products has evolved quickly to become a viable alternative to individually purchased audio-visual elements, for a painless "Just Add TV" approach.
A complete HTiB bundle arrives with a DVD receiver unit, featuring the necessary sound decoding/amplification combined with the DVD player inside a single chassis, along with five loudspeakers for left and right front, left and right surround/rear, a dedicated center channel plus a subwoofer, along with all the necessary cabling. These "5.1 channels" work together to recreate a true theater-style sound experience in the home, only on a smaller scale. Audio-only HTiB solutions are also available, without DVD, and almost all HTiBs offer inputs for connecting multiple source components.
If you already have speakers, how many? Dolby Digital is the audio standard for DVD, requiring the five speakers plus subwoofer to properly reproduce the soundtracks of most modern films. If you already have two speakers, it isn't necessarily as easy as adding three more. Dolby Digital requires full-range speakers - that is the ability to reproduce the highs, lows, and midrange of all five channels. The best surround speakers also dissipate the sound for a more realistic rear soundstage. Under normal use the front speakers handle most of the load, so you will need robust left and right mains, plus a center channel with exceptional clarity (for dialog). Centers are ideally horizontal and tend to be placed directly above or below the screen.
What is currently driving your speakers? If you own a receiver, is it stereo (two-channel) or multi-channel? And does it offer the latest audio decoding formats? The soundtrack data on the disc needs to be decoded, and that decoded signal must then to be amplified for your speakers. In addition to Dolby Digital, does it offer DTS, the outstanding rival multi-channel format? And how much power is at your sound system's disposal? Your sound system (the receiver/amplifier plus the subwoofer, if it's self-powered) should be capable of delivering at least 450 watts total system power for a small-to-medium-size room.
If you are in the market for a new TV as well, keep in mind that American television is changing over from analog to digital, and in less than a year ATSC will officially be the new standard. So make sure that your new TV contains an ATSC digital tuner. All new HDTVs have it, so savvy consumers will make the extra investment and stave off obsolescence by making their next purchase an HDTV. You'll gain widescreen display, best for movies and an increasing number of television shows (the black bars you see on the top and bottom of many programs will go away) as well as outstanding picture quality and the latest inputs.
Size matters in more ways than one, as you need the right size screen for your room. The popular 42-inch widescreen TV, for example, has an ideal viewing distance of about 5 to 10 feet. Any closer will reveal imperfections in the image, while too far minimizes the impact. About 1½ times the diagonal measure of the screen is the minimum distance for the viewer, and three times is the maximum. So measure not just the space in your shelving unit but also the layout of your room before you begin shopping.
If your current television is several years old, your DVDs will probably look significantly better on most new TVs. Look for progressive scan and component video input, just make sure that whichever DVD player you use - traditional or as part of an HTiB - offers progressive scan component video output. DVD is not true high definition however, so if you plan to rent or purchase movies on disc, Blu-ray is the way to go. A Blu-ray deck will not only play Blu-ray high-definition movies but will make your current DVD library look better than ever.
3. How much can you spend?
What you get is largely determined by what you can afford to pay. In the world of displays, more money nets you a larger screen size and the latest technology, all the way up to 1080p, the highest-available resolution on consumer monitors. One point not to be compromised on is HDMI (high-definition multimedia interface) input, the gold standard for connectivity, which assures the transfer of full-quality HD video and multi-channel audio from the latest source components.
As little as $500 can buy a respectable HTiB, designed around standard-definition DVD. If you insist upon buying a new standalone DVD player, don't spend more than $100: That price will bring you outstanding features and performance at this point in the product's life cycle, and you won't feel badly when you inevitably upgrade to Blu-ray.
Performance is the key factor when purchasing loudspeakers, as you will simply want the best sound that you can afford, as defined by the "performance envelope" of frequency and dynamic range. A speaker's ability to reproduce lower bass (even in addition to a dedicated subwoofer) and higher trebles is critical, along with the range across which it can enjoyably reproduce soft to loud audio. Proper demos can be difficult to find at retail, so it's wise to find out if you will be able to audition the speakers at home and return them if necessary.
Of course, your speakers need to be a good match for your amplifier/receiver, and not too piggish in their power demands, noting their nominal impedance rating. Speakers with 8-ohm impedance are extremely common, and lower ratings will mean the speaker is drawing more electrical power. More discerning listeners lean toward separates, that is a dedicated decoder/preamplifier box that then passes the prepared signal to an outboard amplifier, vs. a single, integrated audio/video receiver. The performance of receivers - which can function as control centers and switchers for all of your home theater gear, with HDMI ins/out - now approach the level of separates, while their value and versatility can't be beat. Recent receivers also support the most sophisticated audio formats available on Blu-ray, including Dolby TrueHD and DTS-HD Master Audio.
Do your research, don't skimp, and be sure find a comfortable chair, because your audio/video system will bring you years of enjoyment.