Let me rephrase my question...is there a big difference between an HTiB and an entry level AVR/Speaker combo? I agree that the display is just a part of bigger set up where everything should be considered.
Given this, what are the possible entry levels that I should be looking at (AVR and speakers)
It depends on what kind of HTIB you are comparing to, there are also decent HTib like JBLs, but during the time when I was still starting this hobby, I found out that most entry level AVR setup beats most HTiB in terms of musicality and HT experience, plus because it's a setup by components, upgrade is easier than HTiB. I can still remember when I sold my Creative 7.1 speakers and replaced with an entry level AVR+speakers+sub, first impression when I watched DTS movie is, " W
W!". Im firm, I'll never go back to HTiB.
For AVR, look for those good for both music and HT, I suggest HK, Denon and Onkyo. For speakers, try wharfedales and mordaunt shorts, they are bang for the buck. If you can still extend some cash, look for AVR with pre-outs so you can upgrade with power amps later. Good luck!