I'm not normally one that cares about home movie systems and all that stuff, but I've been impressed recently.
When I moved the other computer upstairs to make a place where we could play movies I bought a cheap 8 channel soundcard and 5.1 speaker system.
My first try using them wasn't spectacular, as the Power DVD software refused to play back more than 2 channels of audio unless I had either an expensive creative soundcard or paid to upgrade my version of the software. Stereo using a subwoofer is *ok* for movies, but that's all.
Enter VLC media player.
It has a clunky interface, partly because it does lots of things. However it's free AND plays back DVDs with full surround sound. This time, even though the movie we watched was the derisory 'happy feet' (how to put a political message in a kids film and make it annoying) the speakers handled the sound in a way no 2 speaker system could have. OK, I'm sold.