HELP me bring my system into the 21st Century

Here's the deal: The wife wants a flat screen TV. I'm ready to pull the trigger, but will also need to upgrade all my components to support HDMI. I'm looking at a Panasonic VIERA TC-P50G25 50-Inch 1080p Plasma HDTV. The price is right at about $1400 and representative of my budget.

I've been fairly happy with my audio setup which is 20 years old now. The Pioneer VSX-9500S receiver has never really driven my Vanderstein 2Ci's with the respect they deserve, but it's been OK and integrated with all my components (Tivo, Old Sony tube TV, DVD player, Slingbox, etc.) nicely via RCA cables. I use to have some higher end rear bookshelf speakers and a nice center speaker once upon a time, but they disappeared somewhere over the years. I can't remember the brand, but even though they weren't Vandersteens, they rounded the sound out well when watching movies. When I had them, I still generally listened to music in two channels.

Now, I'm gonna stop here and confess what I'm sure is pretty obvious. I don't know jack about high end audio equipment other than that I like the way it sounds. That's why I'm here. I hope you folks can give me some guidance and help me step up my game.

I'm afraid my budget is limited, so I hope to accomplish this without breaking the bank. Originally when I considered this a few years back I was looking at a Rotel multimedia receiver at about $1000. Times have changed though and the new units are much pricier.

I've also wanted to go surround, but going all Vandersteen is just too expensive for me (not to mention bulky) and I've not been able to find supporting speakers that would do Vandersteens justice.

Egh... I don't know what to do here. Basically I want to update my receiver to a unit that will support my Vandersteens, HDMI and handle some of my older components. In a perfect world I'd have some nice little satellite speakers for my center and rear channels. My space, already dominated by the Vandersteens, begs for a smaller size surround solution.

You guys really know your $h!t when it comes to audio. I fear I'm that guy way in over his head who may be better served by selling his Vandersteens and getting some consumer package that he can set and forget. But I do love my Vandersteens and I appreciate good sound. Can you help?

Spending about $1400 on my TV, and expecting to drop another $750 on upgrading the TIVO, do you think I can find an audio solution for $1500-2000?

Maybe I just get a new Surround Sound Receiver and call it a day sticking with a 2 channel setup running my 2Ci's? Maybe I can get a receiver and a speaker package to support the 2Ci's and enjoy surround with my new TV? Maybe I scratch it all and unload the 2Ci's for something lower profile with good sound, maybe less audiophile and more enthusiast/consumer grade?

What say you?

I appreciate anyone taking the time to offer their insight. I look forward to your responses!

FYI- I'm based out of Los Angeles in case anyone has any suggestions of any retailers that you'd recommend.

Thanks again.
you've stated that (a) you have around $2000 to spend on upgraded audio, and (b) you love your vandersteens. with those criteria, i think you'd be best served by keeping your vandersteens and getting a nice 2ch integrated amp (e.g. rotel, cambridge)and a blu ray player (oppo, panasonic); you can run your dvp and tivo directly to the tv. esp. the amp and blu ray shouldn't cost you more than a grand; i'd look first at the classifieds on these pages.
your other alternative, which is going to "consumer-grade" surround sound, inevitably will involve some sonic compromises--if you figure that a mid-level avr (onkyo, yamaha, etc.) will cost you around $900, you don't have much left for a blu ray player, subwoofer, rear speakers, and a center which will match your vandersteens (which, optimally, should be a vandersteen center). i also don't see much point in buying an avr to use solely in 2ch--it won't sound as good as a dedicated amp. i've learned the hard way that (whether it's stereo equipment, shoes, friends or anything else) you're much better off having a few really good things than a lot of fair-to-middlin ones.
Given you budget, HDMI need, satisfaction with Pioneer receiver in past - I would suggest to "consider" Pioneer Elite SC-25. It can be had, new w/ warranty, from Magnolia (in LA, CA) for about 1k (open box). It is THX Select 2+ certified but everyone believes it is almost same as SC-27, which is THX Ultra 2+ certified. Does 140W x7 (all 7 channels driven at the same time and bench tested), people are driving 4Ohm loads with it, has sophisticated room correction software included (at 1k price range), enough HDMI connections, iPhone/iPod, media gallery/DLNA support etc. etc. It will leave you about $1k to get a good surround set and BD player. Get an Oppo BD-80, not the BDP-83, for $289 Brand NEW, as w/ 50" LCD TV you won't notice difference between picture quality of Oppo 80 and 83. And you will definitely be in 21st century!!

I use a SC-27 with Oppo 83, Pioneer FPJ1 projector and B&W 5.1 set with fronts bi-amped. I did want simplicity a receiver provides (no separates) and 2010 media functionality, with 80% usage for movies / HT. I looked at Integra, Marantz, Rotel 1560, Arcam AVR 600 etc. but nothing came close to the price-performance-feature-power combo (VALUE) for what can be had with SC-25, for about 1k today. It uses ICE Power / class D amps, so heat is not an issue and IMO a good green thing to do as well.

I am in norcal and feel free to PM me if you have any specific questions.

Good luck!
Thanks guys. Two very different solutions for my situation. This certainly gives me food for thought.

I'm leaning towards a 2 channel integrated amp, something that will finally give my Vandersteens life. After all I've been running a 2 channel set up for a while now. We live in a rental, and as much as I want to, the space isn't really conducive to a surround set up. But if I found a speaker set, something that was low profile and could hold its own to my Vandersteens, I'd certainly be tempted to go the Pioneer route.

So going with a 2 channel integrated amp how would that work with HDMI? Would I still be able to connect the TV to my video sources via HDMI and then use separate audio connectors on the amp? I thought HDMI was an all or nothing deal?

Any more details on brands, models, etc that I should look into, or Los Angeles based retailers that I could check out would be appreciated.

Of course if anyone else wants to chime in. Love to hear your thoughts.

Thanks again!
First let me say I am a beginner in all this... I was in a similar situation, though not with speakers as nice as the Vandersteens. I had B&W 685s in a 2.1 office system, and I was very happy with the sound. I would move the system upstairs for certain home movie events, like 2012 or District 9. The sound was very disappointing, maybe because of the lack of bass management on my 2-channel receiver (an older Yamaha). Granted, the movies might have sounded better using a better 2-channel integrated, but not much.
After much soul searching, I decided on a Denon 3310ci, which I found from an authorized dealer at a good price. Testing 2.1-channel music in my office, I had the B&W 685s bi-amp'd with the Denon's rear channels, which are assignable, and I got really good results. The office was a small room, results were much less favorable in the large living room, where the 5.1 system is getting built. The Panasonic above might well give you better sound for music, I don't know. I am now planning to purchase a used 2-channel amp, such as a Rotel RB-1070 or a Parasound HCA-1000, both of which can be had for less than $400. I will use this amp to power the fronts. 2-channel music should improve.
IMHO, the receiver is necessary to capture the detail of the movie soundtracks. If you grab one that has pre-outs, and can decode the latest audio codecs, like Dolby True HD and DTS HD, you can expand your system later with external amps and have a very satisfying music AND movie experience. In my searches the cheapest receiver that had all this was a Yamaha, but I already owned a Yami and wanted to try something different, so I went for the Denon.
You could also buy a Blu Ray player that decoded the high-def sound into 5.1 or 7.1, and had the unbalanced connections on the back for each channel, but then you'd be spending a fortune in interconnects. You would still need a surround processor that had the inputs and a multi-channel amp, but these can be bought used and are cheaper than the current HDMI receivers. I didn't go this route because of the cost of the interconnects (+/- $400 for entry level Audioquest!).
In my experience the Dolby True HD and DTS HD soundtracks are incredible, and worth the expense of a current receiver. You have to decide if you are a music guy or a 2-channel guy - there are pre-amps and integrateds out there that have home theater by-pass, so you can hook them up in your HT system and use your 2-channel rig to power the fronts while watching movies. But IMHO a 1.3 HDMI receiver is the only way to go when watching Blu Ray movies.