To make a home theatre you need a video monitor, a video source, an appropriately enabled receiver and surrounding speakers. That's all. Big Theatre. To the age old question: is bigger better? When it comes to home theatre, the answer is generally yes. "Theatre" and "big" go hand-in-hand so bear this in mind when selecting products.

The Sights
The type of video display you choose will depend on your budget, how you intend to use the display and the space where you plan to enjoy your home theatre.
New video display technologies are cropping up all the time. Each has its strengths and weaknesses at different price points.
Available are the traditional CRT (cathode ray tube), LCD (liquid crystal display), projector, DLP (digital light processing), plasma, LCoS (liquid crystal on silicon), and there are others on the horizon such as organic light emitting diode (OLED) and SED (Surface-conduction Electron-emitter Display). Check them all out and make your own mind up what best suits your tastes and viewing environment.
Think wide – as in widescreen. Widescreen video monitors are the shape of the future. Your display should match the format home movies and high-definition TV (HDTV), are now being presented in.
Widescreen displays have screens that are more rectangular (16:9 ratio)  than traditional, squarish (4:3 ratio).

The Sounds
A home theatre's surround-sound system consists of five or more speakers, with three in the front near the video display and at least two on the sides or at the back of the room.
The three front speakers do most of the work to produce sounds that correspond with the action on the screen. Two speakers, called the front-left and -right channels, are typically placed on either side of the video display. A centre-channel speaker is often placed above or below the screen. Two or more speakers on the sides or rear are referred to as surround speakers.
The centre-channel speaker is the most important loudspeaker in a surround-sound setup. This is because it reproduces a great majority of the sounds you hear in a movie soundtrack, including dialogue. You'll want to hear every word clearly and feel as if the dialogue is coming directly from the actors' mouths.
The role of surround speakers is to convey ambient sounds, such as background noises, rumbles or passing cars or planes. These speakers help fully immerse you in a movie.
There are several surround speaker options. You can have two speakers, one on each side of the seating area. You can have three speakers, with one on each side and one in the back, allowing you to better hear the effects of movement such as that of a passing car or a train or airplane. You can have four speakers, with two on each side. Or you can have even more speakers. It's really a matter of how far you want to go.
Subwoofers produce low bass sounds so you will hear the full impact of sound effects such as explosions or the roar of a jet engine. Subwoofers can be placed virtually anywhere. People often put them in a front corner, behind a plant or a table or even under a couch. Subwoofers are not full-range speaker channels, meaning they only produce a fraction of the sounds you hear. In surround-sound parlance, subwoofers represent the ".1" in 5.1, 6.1 or 7.1 systems (5.1 meaning the basic surround-sound setup of five speaker channels plus a subwoofer).

Component yourself
To get sound to the speakers and video to the screen, you'll need components. There are many different categories and subcategories to choose from, including DVD players, digital free-to-air and pay TV receivers, surround-sound receivers and controllers, and outright amplifiers. Receivers contain amplifiers, precluding the need for a separate amplifier, though for higher performance you may opt for a separate surround-sound controller and a pre- and power-amplifier combination.