I just setup a buddy with a cheap system and he LOVES it. The Energy 5 Micro is onsale at Crutchfield for $399 shipped and it's 4 surround speakers, a center, and a subwoofer. In terms of receivers you can save a bunch and buy a 5.

1 receiver instead of a 7. 1 receiver. Most people do not have 7 speakers to hookup anyway.

The newer Pioneer line of receivers (519, 819, 919, and 1019) all got outstanding reviews for their functionality and sound, and they range from $200-$500

1. Whats a sufficient yet affordable 7.1 Surround sound system ?

Amazingly the Sony STR-DH700 7.1 is a good sounding and affordable system that I would recomend.

I hate to say it but I have an Onkyo 805 and my friend bought the Sony and brought it over and it really does sound ... better in a way... It seems to get loud and crisp sounds.

But I do love my Onkyo it has good set ups.

2. Does the Turtle Beach Earforce P11 Headset Have Surround sound?

I think the work your looking for is stereo, or it can play a different sound in each ear.

Yes, they do that. It does sound like it is surround, though. I wonder of they will every make headphones that go around your head, truly surround :o

3.

What should I do for surround sound?

Well, I would suggest you increase your budget a bit & forget the idea of wireless speakers. At this point, all you need is a decent receiver & 5 speakers + a sub.

So, go that route. A home theater in a box is cheap. Wireless speakers have limited frequency range.

The newest Blu-ray discs have a full frequency range coding for the surround. So you will want speakers with the biggest frequency range you can get. The way home entertainment technology has turned, trying to get anything on a budget under $300 is just about impossible.

Last year in Oct & Nov, it took me nearly $2.5K to update my system with discrete surround, flat screen HD TV, & Blu-ray. Plus all new wiring. And my system, while still very nice, is still small in comparison to others.

Get a Yamaha RX-V663 receiver ($499) and Polk Audio speakers ($399) See link.

4. Will you help me find a surround-sound audio switching solution?

I have to assume that whatever you are using the multi-channel analog inputs for now has higher priority than your SACD player ....

otherwise I would suggest running whatever that is via optical and plug in the SACD. Assuming that is not an option (and I agree using splitters to combine two outputs is not a good idea) you are not going to find anything cheap. The first link is to a review of a multichannel analog switch that would do the job ...

but $450 is pretty steep. The second link is for an even fancier model for more $. At these prices I would suggest trading your DVD/SACD player for a new Oppo BDP-83 (last link) ...

it's no doubt superior to your present one and will add Blu-ray capability for $499.

5. Can a surround sound be achieved with a 4 channel stereo?

Yes, if you add two rear speakers you will get most of the surround sound effect.

Another good addition is a front center speaker for dialog. Most of the time if you are not a real audiophile, 5 speakers like that will sound just as good as a fancier setup.

6. What HDTV should I go for?

If you plan on getting a blue ray player, then you want to get the 1080p. Look for 60,000 to 1 ratio, you want to maximize your blue ray experience. You might want to check for HD MI ports and RCA ins and outs.

There very important for Surround sound and High def

7. Whats the best surround sound system I can buy?

I like Ryan L's answer.

You can get good components for the money you want to spend. Sony and Bose are low end and well suited for double wides and RV's. People buy them without even listening or reading the reviews.

Stereo shopping is fun. Bring a few cd's and spend a day and go to a few shops. You will enjoy the time and be a lot smarter about your choices.

Good luck!