You don't need a lot of money to build yourself an impressive home theater system. Yes, typically putting one together means piecing together a bunch of speakers, a supersized plasma HD TV, and whatever other add-ons you want. But really getting a great cinematic experience involves nothing more than having a computer with some fancy programs.
Check out this computer tutorial to learn how to build a home theater PC with HDTV and Blu-Ray. You'll find out how many GB of storage you can get away with and the best hard drive size.