You are asking all the right questions. Getting into home theater is daunting because there is such a huge range of products and prices, from $200 including 5 speakers, sub and DVD player right up to tens of thousands of dollars. Maybe half of the systems are overpriced junk but half of them aren't... and the sound keeps getting better right up to the top of the range.
There are a lot of decent small systems (speakers + sub) in the $500 US range which will sound pretty good in either a small room or a small area of a large room (ie all the speakers are fairly close to the listener, not spread out around the room). The sub will have a tough time in the large room even if everything is close together, but if you don't play too loud that won't be a problem. Sound quality and clarity won't be fantastic but it won't be too bad either.
From that point you can go up in two directions -- bigger speakers that can handle the room with the same clarity, or higher quality small speakers. Both of these are going to be in the $1000 range; not sure either makes sense for you.
Next step up is to high quality full sized speakers (bookshelf or floorstanding) and the Axioms suddenly start to seem like really good value, sort of upper-middle-class performance at lower-middle-class pricing.
If we want to use "Axiom-class" speakers as a reference (say $2000), I would say you get perhaps 40% of the performance for 25% of the price ($500 systems), 70% of the performance for 50% of the price ($1000 systems) etc.., ie you still get more for your money by purchasing a considerably less expensive system. Nobody can beat that equation including Axiom.
Everyone has their own threshold where they say either "I think this is mighty fine; I could get better but why bother" or they say "I know this isn't perfect but it meets our needs for now and I don't feel like spending more now".
I have a lot of friends who are perfectly happy with their $500 system because it plays at the SPLs they need (moderate) in their room configuration (fairly small or intimate arrangement in a larger room) with the content they care about (95% movies plus a bit of background music). Some of them have $10000 invested in display & player plus $700 in speakers & electronics and that's right for them. I have $500 in display and player, $3000+ in speakers & electronics but for me the sound is the most important part of the experience.
If you are looking for high quality sound at "real movie" type sound levels then you are getting into the $1500 and up systems and Axiom is a very good competitor in that market. It really depends on where your own threshold is.
One of the terrible realities is that the room makes a huge difference in the quality of the sound you hear, so even auditioning in a variety of rooms isn't going to give you the whole story. What I can say is that there is a definite improvement as you go up the price range, something like :
$500 -- not super clear but OK; decent volume in a real small room, disappointing volume in a larger room
$1000 -- significantly better clarity OR ability to fill a larger room (but not both)
$1500 and up -- significantly better clarity AND ability to fill a larger room ($$ keep going up as your room gets bigger and your concept of "loud" gets louder
).
