I've always been a big fan of Cambridge Soundworks speakers. No, they aren't "audiophile quality", but you can get a really nice set for reasonable money. $300 will get you their
MoveWorks 408 set, usually $350, now $300. $400 will get you a
New Ensemble II Home Theater Speaker System , usually $500. IMHO, the New Ensemble speakers are a very nice set. I've got the original Ensembles and really like them.
Nowadays, most of the home theater "sets" are designed to have four mid-upper range speakers, a center speaker and a subwoofer. You can still get "normal" full-range speakers, but the sub adds an incredible amount of depth, and it works out nicely to not have full ranges all across the board. I'm sure a lot of others will differ with me on this, too, but for the money, these this set can't be beat.
Spend at least $200 on a receiver - A Pioneer 509S/510 would be a good choice in this range, if you can find one - My Costco had some 509S' in stock for $199. It's not a Denon, but it's got plenty of power and gets reviewed as a good quality box.
Also, what kind of receiver you get depends a lot on what you do. Do you watch a lot of VCR tapes? If so, you might consider paying a bit more for one with Dolby ProLogic II, which greatly enhances the ProLogic encoding on your typical videocassette. If you're mostly into DVD's, then you really don't need it.
Best bet - Get your dad into a good audio shop (Not someplace like Best Buy, some place like Tweeter) and have him listen - Make him understand what a sub gets him. If you happen to be in a town with a Cambridge Soundworks store, go in and listen to their stuff - You won't be dissapointed!
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