Note Sony DAV-500ZF one-box ... but what though?

[DaKid]

Hiya,

I'm hoping you guys will be able to help me. I'm asking this on a handful of forums, but I'll be honest; I'm expecting you guys to come up with the goods on this!!

Background:
A few years ago I inherited £500 and, after a quick trip to Richer Sounds, decided to buy myself a decent hi-fi with it. I ended up with a Yamaha Amp/Receiver and CD-Player and a couple of Eltax Symphony 8.2 floorstanders.

Problem:
I now want a home-cinema setup to go with my five-year-old Sony 32" CRT widescreen telly, with a budget of £500. In the latest What Hi-FI Sound and Vision, they gave the Sony DAV-500ZF full marks as a good one-box solution, and it costs just £449 by their price in the review.
I was all up for thinking this was the answer when I started chatting to some audiophiles at work and they seem to suggest that I'd be better off taking my pair of Eltax Floorstanders as the start of a bigger system. This would mean - possibly over time - adding bookshelf-speakers on stands at the rear, a subwoofer, a centre-speaker, a DVD-player and a surround-sound amp.

Help:
This is where I'm hoping you guys will be able to help. What is the absolute minimum I'll need to get my surround sound? Obviously I'll need a DVD player and rear-speakers, but beyond that how much is mandatory and how much can be added later? I was also considering a multichannel receiver that would mean I could send my CD player through the existing amp and onwards to the multi-receiver (turning the existing amp into a sort of pre-amp??), and then I could control hi-fi and DVD all through the one receiver. How realistic is it to hope that I could get all of the above within my £500 budget and yet still end up with a better sounding solution than the Sony one-box? How about if I increased the budget to £750? (Possibly maybe perhaps possible )

I would really appreciate any help or advice you guys can offer; even if it's simply to say "this isn't the right place to ask ... ask here instead and make sure you ask ..."

Many thanks in advance