Hello folks, new to the community here. New to audio in general! I currently just use the factory speakers of my 56" DLP TV, I think they're two 15watt speakers. I have a cheap 2.1 set of computer speakers (~$30), and that's about as high end as my audio gets. I'm fairly tech savvy though, so don't be afraid to explain things to me in technical terms.

Long story short, I'm looking to upgrade from using the factory speakers to a 2-channel system. I'm a student living in an apartment that has sound regulations, so making the windows shake is far from top priority. I just want a fully, more accurate sound. Of course, quality at higher volumes is always a plus for when I move into my own house somewhere down the road. I can't really see a difference between eBay auctions for $100/pair compared to $2,000/pair. I'd like to get the receiver and pair of speakers for $500 or less, if possible. I like the idea of the floorstanding speakers not needing a subwoofer, but considering my pricerange, are they a reasonable option?

I know nothing about receivers either. I want to make sure I have enough inputs for my components, which are as follows...

Playstation 2 - Composite
Gamecube - Composite
Xbox 360 - Component
Motorola DVR/Cable - Component
Samsung DVD - HDMI

One thing I was uncertain about is component audio input. E.g., if my receiver has composite audio in, could I send the three component video cables to the TV and the two audio to the receiver, or would I have to go optical?

Also, how do wattages work? From what I understand, a speaker blows when sent more juice than it can output, right? So, to prevent speakers from blowing, I should make sure the speaker is rated for a higher wattage than the receiver outputs (per channel)?