Sometimes I wonder where people make all their money, then I realize they probably aren't married and don't have law school debt. 😀
Anyway, for a decent receiver under $300, take a look at what Pioneer has. I found their VSX-D409 for $200 but usual price is closer to around $250. It has Dolby and DTS decoding, speaker connections for 5.1 and for an additional set (great for a home theater setup and a bookshelf setup). It has connections for just about every component imaginable and has received good reviews at audioreview.com. It supports 2x100watt and 5x100watt output, which is plenty for me. The remote sucks -- that's the downside.
Sure, it's not Denon, Onkyo, Harman Kardon or Yamaha (etc), but then again if the decision is between buying a REALLY nice receiver or getting a nice one AND buying the other components, I'd say that a receiver that's not connected to anything is a little useless. 🙂
I'd say your priority is to determine a budget and work within it. These components can get ridiculously priced -- the top of the line Infinity tower speakers are about $2000 EACH, and I'm sure there are others out there that are more. I liked the idea of buying the entire home theater system together because everything matches (acoustically and aesthetically), and it was just less of a hassle to research systems as opposed to individual components.
My set-up: Pioneer VSX-D409 receiver, Panasonic DVDR30, and Infinity HTS20 speakers. I am very happy and spent less than $700 on it (with some heavy discounting, however).