For stereo listening I would really recommend the separates. I started with a 2 channel receiver and ended up with my current setup (check it below). Great improvement over the receiver. Above your price range though.

Axiom M60s, QS4s, VP100 Onkyo TX-SR804 Oppo 970HD Rotel RB-1080/RCD-1072 REL Q150E sub, PS 3