For any serious film watcher, a home theater is a worthy investment in time and money. While the most complicated home theaters will require a dedicated room, specialized furniture and hiring a certified technician in order to set it up for optimization, none of this is required. With a simplified set up you can get a great home theater that gives you the feeling of being in the theater.
The television is one of the first things that people think of when they think of a home theater. Many people will put as much money into their television as possible in order to maximize the size and quality, but remember that price does not always equal quality. Now a days the choices out there are HDTV's, and they come in two flavors, 720p and 1080p (Full HD). If you are looking at a TV 32 inches or smaller, then the 720p is all that you require. The human eye can not tell the difference at those sizes. Anything larger then 32 inches and you should consider getting 1080p television for improved quality. The technical specs will talk about contrast ratios, and refresh rates as well. Contrast ratios are somewhat meaningless, so you can judge the image quality based on the images you see on the set. Refresh rates do help the image appear to be smoother and have less "ghosting" of the image, so you might want to pay attention to that. Remember to buy a size that will fit comfortably in your room and will not cause eye strain because you have to sit too close to it.
As important as the television is, sound is equally important. A good sound system will make the television seem larger and psychologically add detail to the image. It is a strange effect, but it is a psychological fact. If your budget is small or you think that putting together the actual system would be too hard for you, then a home theater in a box might be right for you. It includes everything you need in order to play dvds/blurays, and the speakers in one package, except a television. They are compact with small speakers, and they deliver acceptable sound with little in the way of confusion. These can be good systems, however, they do have some draw backs. They are not easily upgradeable, and if your dvd/bluray player dies, the entire system might have to be replaced.
Assuming you want to go the component routes, you will need a source (dvd/bluray), a decoder/amplifier (receiver), and speakers. The A/V receiver will be the hub of your home theater, as everything you buy will need to connect
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