Sound System for TV, PC & 360 <£200

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I've noticed a similar thread, but i decided to make a new one.

So i've got a 32" lcd toshiba i use it for:
Watching Digital TV
360 (games/hd-dvd)
Streaming video through my pc
& Possibly a Blu ray player or a PS3

Initially i wanted to get a 5.1 home cinema set, but i have a feeling i'd regret it. So i'm happy to get a stereo set that i can "build up" over time and finally get a full 5.1 system.

Couple of questions first!
Is optical out only for 5.1 surround sound? Or can it be used for stereo?
How would i get the Digital TV sound through the speakers? (the freeview is built into the TV)

Ok so i thought of getting one of these (i like the sony):

Pioneer HTP-GS1 (for 360)
Sony HT-DDW790
YAMAHA AV 61 Home Cinema Package

Or would it be better to not get a 5.1 system? Let me know what you think!

If you reply, thanks for helping a noob!
 
I have a Logitech Z-5400 5.1 set that cost me around £150 which i use connected to my 32" LCD TV, x360, sky box and PC and it is fantastic for the money :)
 
I'd advise you take a look at the Logitech Z-5500 in your price range, it's probably the best you'll get at that budget. The Z-5400 is good too but my advice is to spend the extra on the Z-5500's as they are a lot better.

a lot of similer sites sell them all with good/positive reviews. If you do get the Z-5500 make sure you get spare fuses as they blow a lot ... 2amp, slowblow I believe you need. (I've gone through two already)

The Z-5500's have optical, coax, 6ch analoge and a 3.5mm. They work well with my PC, 360, PS2 (360 or PS2 at once in optical until I get a splitter/switch) and soon my Sky once I get a RCA to 3.5mm
 
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