Wow! A $1000 clock radio. That's amazing.

Those guys gave you some good advice. I would suggest getting the best speakers you can afford (are towers out of the question?), getting by on the receiver (by the time you elect to go 5.1 who knows what will be the standard HT format?), I don't know about the sub - maybe check eBay or Audiogon for a deal on something used, and spend $20 on wires.
Good luck.