Re: What does it take?
If you aren't some terribly picky you can prolly pick up a decent 5 channel receiver to handle your processing/power needs. Your best bet for the speakers is to listen to a bunch of sets until you find the ones you like.
I ended up making some speakers that I found plans for online, and they sound great to me and weren't expensive.
If you are handy enough http://www.zaphaudio.com/ has some good ideas, and diy forums can be a great asset.
I wouldn't worry about spending a bunch on your surround speakers, focus more on you mains and center channel for HT purposes.
I'm running a MJ-18M in my tiny room for HT, headroom is a plus
HU: Pioneer 880-prs
Mid/High Amp: MB Quart DSC4125
Front Stage: PG mids/Vifa tweets running active
Sub Amp: DD Z1
Sub: 10" Mach 5 SPL/Hybrid 1.25ft^3 @ 38hz
DC Power Alt