1 - I would (indeed have) go for a music system, and plug the TV/DVD
into it.  This means no compromise on music, and IMO such systems are
perfectly good for AV - you just need the ability to go fairly loud,
really.  If you watch lots of TV and films, maybe a surround system
could work for you, but do you want all the extra speakers and cabling?
That's why I got rid of mine.

In terms of specific recs, I'm not too familiar with the Oz market. 
All my stuff is British, which may get expensive once import duty and
the exchange rate are considered.  Given your budget I would be looking
at ebay and secondhand - you'll get a lot more for your money.

2 - you need powered speakers or an amp plus speakers.  For a bedroom
the former is smaller and neater; Audio Engines are recommended by some
- try a search on this forum, you'll find loads!

HTH

Adam


-- 
adamslim

Those are my principles, and if you don't like them... well, I have
others

'Last.fm group: people who don't listen to any of last.fm's top
artists'
(http://www.last.fm/group/People+who+don%27t+listen+to+any+of+last.fm%27s+top+artists)

SB+, EAR V20, Heybrook Sextets plus some other stuff
SB3, Shek d2, Ming-Da MC84-C, Harbeth HL-P3ES
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