Ask Engadget HD: Best HTIB for under $500?

Recently we've gone decidedly high end with our queries, but now we've got a question that returns to the opposite end of the home theater spectrum. Our friend Jason wants to upgrade to surround sound without spending too much cash, so think about passable HTIB (home theater in a box) systems while you read his question:

"I'm looking to add a surround sound system to my living room. It's a pretty small room, so I don't need anything too powerful. I've already got an upscaling DVD player, and plan to add a PlayStation 3 later this year so I also don't need one with a DVD/BD player included. I wish I could say money was no object, but this is going to be my Birthday Present from my fiancé and since I'll be purchasing the PS3 soon I need to keep it in the low to mid range. Any help or advice would be greatly appreciated."

He asked for solutions under $500, so feel free to suggest any HTIB that might fit -- Sony's 3D ready, LG kicks in VUDU and Harman Kardon has refreshed hardware just to mention a few -- or would you try to talk him into a higher end / custom system? The power is in your hands, use it wisely.

Got a burning question that you'd love to toss out for Engadget HD (or its readers) to take a look at? Tired of Google's blank stares when you ask for real-world experiences? Hit us up at ask at engadgethd dawt com and keep an eye on this space -- your inquiry could be next.