Audio Junkies: Advice on HTIB on a budget

I dont think you are going to hit many of your requirements at the budget you have suggested and get anything most would consider quality.

First off throw out the "1000 watt" requirement, its a pumped up spec that has little to do with actual performance. Many very high quality systems put out a true 25 watt per channel and will play louder than you will ever need.

Some suggestions, buy seperate receiver and speaker or if you are dead set on HTiB get an Onkyo system.

Here are some ideas of things you can get in the ~$500 range:

woot.com had a Denon AVR-1312 for $165 yesterday has 4 hdmi and is a quality brand.

newegg.com has a Klipsch speaker and yamaha receiver combo for $479 that would be nice. The speakers where recently on sale for ~$280 by themselves and will likely be on sale again.
http://www.newegg.com/Product/ComboDealDetails.aspx?ItemList=Combo.860170

If at all possible go to a store and listen to some different speakers and get an idea of what sounds good to you. If you are mostly listening to music a nice stereo setup might be a better buy even with occasional movie usage.

If you can add a bit to your budget (or perhaps wait and piece it together over time) polk audio makes good spkeakers at a reasonable price. Check out craiglist and ebay for some deals. I have the Monitor Series, and really like them. Sure there is better out there, but for the money, they sound great to me.

My opinion, try to stay away from HTiB.