I was really into home theater, surround sound, etc., about 7-8 years back. If yo're working with a smaller room, and want to keep pretty clean aesthetics, I would recommend starting with two high-quality floorstanding speakers. Subwoofers, when they're worth a damn, are typically pretty huge. Floorstanding speakers may not give you the same punch as a huge subwoofer, but that is only really apparent at higher volumes. If you build the system slowly, you can expand with the room size and wait for deals to show up. Don't be afraid to buy used. Sign up to the A/V forums (avsforum is a big one) and keep an eye out on the classifieds section.
I have had Home Theater Direct speakers for years. I have a full surround setup, but I use them in a bedroom at the moment, so I only use the two bookshelf speakers. I would check out their b-stock section; I see that they have both their entry-level and higher-tier tower speakers marked down (Former is b-stock, latter is a discontinued finish).
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