Here are some real basics:
The Receiver is the brain of the entertainment system. The receiver will process sound from the various audio sources (DVD player, TV, VCR, Cable, Satellite, Internal Tuner, etc...) and send the sound to speakers you connect to the receiver. You can use the receiver to switch video sources (i.e. select the desired connected video input from the receiver to display on your TV) but the receiver does not alter the video signal in any way. Good entry level receiver begin in the ~$300 range.
The Speakers are connected to the receiver. For music, you will generally use only the left and right or Main speakers. The Mains are also used for movie soundtracks and surround sound for processing sounds to the left and right of the screen, like a car driving by. For movies and other audio sources for which you want surround sound, you will use a Center Channel speaker, which is mainly used for dialogue in movies and TV. The center channel actually produces most of a movie soundtrack. The rear Surround Speakers reproduce directional sound effects, like a helicopter flying around or other "ambient" sounds. A Subwoofer produces the low bass for music and movies. Speakers and subwoofers vary greatly in price. I suggest buying good speakers as you can afford them, beginning with mains.
The TV has the demanding task of producing images for TV and video sources. You can hook up video sources directly to the TV (Component is best, then S-Video, then Composite, then RF cable) if you have enough inputs. Alternatively, as mentioned above you can route video sources through a receiver. It may be better for the "newbie" to have at least a 27" TV with S-video input and a 16:9/anamorphic mode. Such TVs should be in the ~$750 range.
by Matson, Christopher Robert