6. Source Components:
DVD Player - At a minimum, you need some type of DVD player for your home theater system. Two things to consider in a DVD player: Progressive Scan and Upscaling capability. This will insure you get the best possible image from your DVDs, especially if you are viewing them on an HDTV.
CD Player - Since all DVD players can play CDs, you many not need a CD player. However, having a separate CD-only player in a home theater system is quite common, especially if it is a high-end unit providing better CD audio performance.
Blu-ray Disc Player - Also, if you decide to get a Blu-ray Disc player to access true high definition source content, instead, or in addition to, a DVD player, you can also use it to play standard DVDs and, in most cases, audio CDs as well. For more on the Blu-ray Disc player option, check out my articles Before You Buy a Blu-ray Disc Player, and Blu-ray Disc and Blu-ray Disc Player FAQs.
DVD Recorder - In addition, you may also want to include a DVD recorder or DVD recorder/VCR combination in lieu of your old VCR. However, you can still use your old VCR (especially if it is a HiFi Stereo unit) with your home theater system - but keep in mind VHS delivers very poor image quality in comparison to DVD, and although DVD is much better than VHS, Blu-ray actually delivers a true high definition image. The differences especially more noticable as screen sizes get larger.
Antenna/Cable/Satellite - Also, you need to decide how you will receive your primary television programming: Antenna, Cable, or Satellite. If you opt to subscribe to a Cable or Satellite Service, you might also consider combining that service with a DVR. DVRs provide a way to record your TV programs on a Hard Drive, rather than disc or tape. For some great info on how to incorporate a DVR in a home theater system, check out the About.com DVR Site.
Internet - Finally, another new home theater source option is the Internet. If you have high-speed internet access, you can stream both music and movies, without having to buy a DVD or Blu-ray Disc. An increasing number of Blu-ray Disc players and TVs have the ability to connect the internet for this purpose, but there are also external boxes, referred to as Network Media Players or Media Streamers that provide this option as well, and they are very affordable.
7. Surge Protector or Line Conditioner:
Surge protectors are the unsung heroes of a home theater system. Although they are not foolproof, providing your system with some sort of surge protection is a good idea. You never know when you might have a sudden power outage, or even a brown out that may affect your system. Compare Prices on Surge Protectors.
Also, if you want a more comprehensive way of protecting against power surges, as well as being able to monitor your power, and, in some cases, regulate your power, you might consider a Line Conditioner. Compare Prices on Line Conditioners.
8. Connection Cables and Speaker Wire:
You can't have a home theater system unless everything is connected; whether you buy basic connection cables and speaker wire or the really high-end stuff. The main things to consider is to use the right type, right length, and to connect everything correctly. Some connections are color coded - make sure the colors on the cable ends match the connections on your components - this makes life a lot easier.
In terms of speaker cable, the gauge of the cable can be a factor, depending on the distance the speakers are from the amplifier or AV receiver. I use 16 or 14 gauge speaker wire myself. 18 gauge is very thin and should not be used for longer distances.
9. Universal Remote Control:
One of the most confusing parts of a home theater system is not all components and the connections, but actually managing an controlling it. Each component in a home theater system comes with its own remote, leading to a collection that can number half-a-dozen or more. One solution is to opt for a sophisticated, but easy to use, universal remote that can control most of the functions of each of your components. After the initial hurdle of programming the remote for your system, such a device will enable everyone in the family to use the home theater system without frustration. Compare Prices on Universal Remote Controls.
10. Furniture:
You have a fancy home theater system, now you need some comfortable furniture that will make you want to spend your time with your home theater. Your furniture can be of the traditional sofa and chair variety, or you can opt for specialized home theater furniture that include features such as built-in cup holders and extra-overstuffed padding. Check out some home theater seating possibilities.
Final Take
There you have it, the basic elements of a home theater system. There is no home theater system that is exactly like another, everyone has different rooms, budgets, brand preferences, and decorative tastes when it comes to home theater. The key thing is to keep the basic elements of a well-balanced home theater in mind, while assembling it according to your own needs and tastes.
Although putting together a basic home theater system is not a complicated as it seems on the surface and be a nice weekend project for most consumers, if installing a high-end custom home theater, make sure you enlist the aide of the professional home theater installer.
For some additional resource articles that go into more specifics on how buy items for your home theater, check out my comprehensive guides:
Home Entertainment Basics and Product Guide.
Guide to Blu-ray and Blu-ray Disc Players
Guide to DVD and DVD Recorders
Guide to Home Theater Receivers
Guide to Network Media Players and Media Streamers
For a perspective on setting up the optimal audio system, check out the article posted by Gary Altunian, About.com Guide for Stereos Getting Started With A Stereo System.

