The Receiver: The workhorse of any system, the receiver serves as a hub for all audio/video components. The receiver includes several components assembled in one chassis. Pre-amplifier, amplifier, video-switcher and radio tuner combined, expect to pay upwards of $300 for this one piece.
This figure can leap into the thousands, but a mid-priced piece is more than sufficient for most living areas (and especially those cramped studio apartments). A few years back, a potential buyer had to be especially cautious when shopping for a good receiver, as the switch from analog to digital left many companies using inferior quality goods to keep pricing competitive. Nowadays the manufacturing process has become streamlined and consistent, so if you stick to the name brands here, quality shouldn't be an issue.
So how much power do you need? More than you might think. Contrary to novice belief, speaker damage is often caused by a lack of power. While casual listening might expend about seven to 15 watts of energy, your receiver needs power to account for musical "peaks" such as a symbol crash (sometimes jumping the power output upwards of 500%). If you don't have the power, the amplifier "clips" and you can consider your tweeters toast.
So what's the right number? It's a matter of space. A small to mid-sized room with an average height ceiling should get by with 80 watts/channel. A large room with high ceilings will take about 150 watts/channel. Higher end equipment typically utilizes equal power across all channels, so when shopping look for an indication such as (6.1 channel/100x6). So what's with the decimals? A decimal is indicative of a separate channel for low frequency sounds that are best reproduced by a subwoofer. Subwoofers are generally self-powered and handle but a small portion of audible frequency, hence a (.1).
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