Wire 2 RG6 and 2 Cat5/6.
From my POV, given the budget and likely speaker candidates, a refurbished Onkyo
SR875 for $699 from A4L seems to be about the best value going. You get
solid video processing with only one known bug (4:3 analog sources
stretched on 16:9 displays), the most modern audio features/codecs, Audyssey MEQ XT, and the power supply, amplification, and DACs present all the way up to the Onkyo flagship AVR.
From here, you're still left with $1300 for speakers... pushing to $1500
would help if it won't make or break you. In this budget 5.1 is likely a
much better allocation of funds.
Swans would be my first choice... 2.1s
front and back, a C3 center, and a competent sub (SVS, ED, or DIY for
Other options are the KEFs mentioned,
Polk LSi7s from the Polk Direct eBay store, Polk RTi A series if the Polk Direct store posts more,
HSU HB-1 MK2s,