How to Select a Great Home Theater for Any Budget, Big or Small

With the right TV, Blu-ray player, and speakers, your living room can rival any movie theater. And, contrary to popular belief, it doesn't have to cost you a small fortune. Below we've put together a quick and dirty primer to help you pick the right components for your in-home cineplex.

The Big Picture

Many of us envision home theaters as renovated basements fitted with theater-style seating and a massive projection screen. While the TV you choose does indeed play a large role in your home theater, a sprawling 70" display isn't required. In fact, the average living room can probably make do with a 40" set, like the Sharp AQUOS 40" 1080p LCD HDTV ($429.98 plus $39.97 s&h, a low by $90). Keep in mind that screen size should be determined by your budget and living space, and not by the TV size your neighbors just purchased.

As a rule of thumb, CNET recommends you should sit no closer than 1.5 times your screen's diagonal measurement, and no farther back than twice the diagonal measurement. So for a 42" TV — like this LG 42" 1080p LCD HDTV ($491.95 with free shipping, a low by $71) — you'll want to sit between 63" and 84" away from the screen, or 5 to 7 feet. If you're sitting farther than 7 feet back, you'll want to look at the next size category television.

It's Time to Choose Between Plamsa or LCD

Both Plasma and LCD technologies have their advantages and disadvantages; however, their differences aren't as pronounced as they used to be. That said, most consumers will be happy with either technology. If you're looking for outstanding image quality, your best bet are plasmas TVs. Plasmas generally offer deeper blacks and better viewing angles than LCDs, though there are a few LCD TVs that can match the image quality of today's best plasmas. (Those sets will cost you a premium though.)

Moreover, plasmas don't suffer from motion blur as many LCDs do. To compete, many LCDs have refresh rates of 120Hz and 240Hz; the faster the refresh rate, the more adept the unit is at handling fast-paced scenes. Also keep in mind that plasmas generally perform better in dark rooms, whereas LCDs are better suited in brighter rooms. There are, of course, exceptions to the rule.

If you decide to buy an LCD HDTV, you'll have to choose between a traditional LCD and an LED-backlit LCD. LED backlighting allows for thinner sets and slightly improved image quality. There are two camps to look at: direct backlighting, which means that the LED lights are mounted behind the LCD panel, and edge-lit LED (like on the the Samsung 55" 240Hz 1080p 3D LED LCD HDTV) which uses a series of LEDs along the four edges of the screen. LED-based LCDs are slightly more expensive than traditional LCDs, but their prices are steadily coming down. If you're looking to future-proof your home theater, we'd recommend investing in an LED-backlit LCD. (Check out our feature on 2011's best-performing HDTVs for help with choosing the right HDTV.)

1080p is a No-Brainer

As far as features go, you'll definitely want 1080p resolution, as nowadays there's no reason to opt for less than that. And although 3D TVs are falling in price, they're still pricier than traditional models and 3D content is limited, so we'd say skip that fad. Instead, you might want to consider a television with ethernet ports or built-in WiFi, such as the Vizio XVT553SV (pictured above, $1,399.81 plus $50 s&h), which allows you to stream content from Amazon Instant Video, Netflix, and Hulu Plus straight to your TV. Also, look for TVs with as many HDMI ports as possible, as these let you add multiple components to your TV.

To Stream or Not to Stream

Although it may seem like physical media is losing ground to streaming media, analyst firm In-Stat predicts that 18.5 million Blu-ray players will ship in 2011, an increase from 12 million in 2010. The Enderle Group echoes those sentiments, saying that Blu-ray's shelf life is good through 2025, until ultra high-speed Internet access is ubiquitous throughout the country. So until then, a videophile's best bet is a physical Blu-ray disc.

That said, deals on Blu-ray players have been averaging around $80, and we predict that prices will drop down to $50 this Black Friday. And there's more good news! Most of these Blu-ray players already have streaming support built-in, letting you watch Netflix, Amazon Instant Video, VUDU, and more. A perfect example is the Philips BDP3406 WiFi Blu-ray Disc Player ($79.99 with free shipping via this link, a low by $14), which features built-in WiFi and the ability to stream from Netflix and VUDU. That gives a Blu-ray player like the BDP3406 much more value than a streaming-only set-top box such as the Roku player, which starts at $60 and sees less frequent discounts.

Wide Receiver

A receiver is the brains of your home theater setup that powers your speakers and lets you switch between audio/video components. It also decodes the audio that accompanies most DVD and Blu-ray discs that gives you a whole surround sound experience.

All current home theater receivers offer support for at least 5.1 surround sound. Newer receivers are capable of delivering additional surround sound choices with up to seven channels of power. Some models also include built-in decoders for advanced surround sound formats such as Dolby True HD and DTS-HD Master Audio, which are two high-resolution formats available on select Blu-ray discs.

When choosing a receiver, make sure it delivers enough juice to power the speakers you'll be pairing it with. For example, the Pioneer VSX-1021-K (pictured, $389.95 plus $30 s&h, a low by $83) features 90 watts RMS per channel and seven channels, meaning it can power a 7.1 setup. In addition, it offers built-in decoding for Dolby True HD, Dolby Digital Plus, and DTS-HD Master Audio. This receiver also supports Apple's AirPlay technology, which lets you stream music from any iOS-based device directly to the receiver. The feature adds a premium to the receiver's price, but according to a CNET review of the system, it's worth the price of admission if you're invested in the Apple ecosystem.

Immerse Yourself

Your speakers are just as important as your TV purchase, since they're the components that deliver that immersive experience moviegoers crave. A complete surround sound system, such as the Infinity TSS-500CHR 5.1-Channel Home Theater Speaker System (pictured, $179.99 with $9.90 s&h, a low by $48), includes center, left, and right 5.1 speakers, two satellite speakers (meant to be placed behind the seating/viewing area), and a subwoofer that takes care of bass.

This setup works in tandem with audio formats (such as Dolby Digital and DTS) to create the "surround sound" experience that leads you to believe bullets and helicopters are truly flying over your head. Traditionally, all speakers must be wired and connected to the receiver, although there are some models that feature wireless rear speakers. (However, those models typically don't provide the same quality audio you'd get from a fully wired system.) Likewise, there are sound bars which emulate a 5.1 setup using just one speaker paired with a subwoofer, but for some people, these systems don't deliver the same experience as a true 5.1 surround sound setup.

The "Home Theater in a Box" Option

If the thought of buying and pairing your receiver and speakers seems too daunting, you can purchase a "home theater in a box," which streamlines your purchase by pairing the receiver and speaker system for you. (Usually the receiver also doubles as the Blu-ray or DVD player.)

The disadvantages of this kind of system are that you can't mix and match components like you would if you had a separate receiver and speaker system. And, if you're just aiming to upgrade a few components of your system, you may end up with duplicate parts, as these home theater systems are sold only as package deals.

However, some people may find this option appealing, so stay tuned for an upcoming feature where we look at some of today's top-rated home theater in a box systems!