There is a solution though, and it's not entirely cheap until you set it up and use it. Home theater, yes you don't need the likes of Muvico and AMC. You can run out and spend a few thousand dollars on a system, but really that isn't what I'm talking about and have fun being raped by the Geek Squad. I'm here to tell you that half the system is already quietly humming away in your office. Your forgotten desktop most likely has enough power to act as a DVR, Movie streamer, TV streamer, or Stereo.
First you need a television.
There are LCDs, LED LCDs, and Plasma televisions out there. The main trick is to stick to your budget. Each additional dollar you can afford to spend will get you a slightly better picture. This is the most important part of the system and the only part you may not already own. In this geek's humble opinion look for an LED-lit LCD TV. They offer just about the same sharpness for less than money as a plasma TV. They also have less light bleed (white light emanating from under the bezel) than a run of the mill LCD TV. You can pick up a 42-inch LCD for around $500 if you watch the Sunday ads. Usually these are plenty good enough and it is what I own.
Second you need a PC. Apples will work too as will Linux boxes, but my focus will be on Windows machines as they are the king for the foreseeable future (whether you like it or not).
Frankly, any box that is at least four years old is capable unless it has an Atom CPU in it (ie netbook.) If you can go to Hulu.com or Netflix.com and watch video in at least 720p then you are good to go.
Also, go ahead and splurge on the Blu-Ray drive. This will allow you to play all the discs. Now it helps if you have an HDMI out to plug into your newfangled television set. If not then there are adapters available, but I suggest you go buy a video card with the outlet for HDMI as it also carries the sound signal in one package. A decent card capable of streaming HD video and sound will run you from just under fifty dollars to infinity. The cards called RADEON are my preference but nVidia makes a fine card too. The two companies take turns being the king of the heap so you really cannot go wrong with either brand.
Now for the final consideration you need to ask yourself how much of an audiophile are you?
Again here is where most people overspend by a huge margin. You do not need $400 speakers. I repeat you do not need $400 speakers. Look for a set of 5.1 computer speakers with good reviews like those made by Logitech. You can spend $80 to a $100 for a set that will make your neighbors call the police on you. These monsters pump out that heart-rending sound you hear coming from some of the latest first person shooter video games. They can handle your precious little Blu-Ray of Avatar, or Black Swan.
To run it, you just plug it all together. Hire some strong college kid to haul your PC into your living room so you never have to leave your couch, and plug the HDMI cable to the TV from the PC and plug the speakers into your new TV. Fire up the PC, and surf to Hulu, Netflix, iTunes, or wherever you get your movies and TV and hit full screen. (I won't judge you.) Pop up some of that $1 popcorn, turn down the lights and raise a middle finger to the all-too prevalent middle men in the movie biz.