Hello,
I would cobble together a system via Audiogon and or Craigslist. First, look for a used AV Receiver and then find a pair of tower speakers. You can find formerly 1000 Dollar plus receivers for under 200 Dollars if they do not have HDMI. Just make sure the receiver has multichannel inputs so you can benefit from the new surround codecs (True HD and DTS-MA) that are available from Blu Ray players.
For speakers, look locally for a pair of Floorstanding Speakers. Should be able to find a fairly satisfactory pair for around 300 Dollars used.
I realize you would not have Surround Sound all at once, but you will have a massively better system. As long as you purchase quality Floorstanding Speakers, bass should actually be better than a low price HTIB (Home Theater In A Box) "subwoofer". Especially if driven by a quality Receiver.
As funds permit, add a Center Channel Speaker, Surround Speakers (tons of cheap bookshelves out there that work well when put on stands), and finally a subwoofer.
While this is not the path of instant gratification, it is the path of truly quality sound. A high quaity receiver and quality pair of Floorstanding Speakers will sound better than 6 channels of low quality dreck. Furthermore, if you buy quality components, you should be able to get your money back in the future should you decide to upgrade. HTIB's have next to no resale value.
Cheers,
JJ