Well, if you're looking to upgrade to surround (but don't want to pay an extreme amount), the sound will almost definitely not suck on these receiver brands:
Harmon/Kardon
Denon
Onkyo (I would stay away from the very low end of this brand)
With those three you're going to get much better sound than you ever would out of a Sony receiver. And as for running video through a receiver, unless it's nescessary, I wouldn't do it, as even the high-end brands will degrade picture quality a lot of times (except for the new HDMI ones, but those only use a pass through, so they don't really mess with the video connection anyway).
As far as speakers go, if you don't want to pay a bunch for them, go with Polk Audio, Infinity or on the higher end, Boston Acoustics.
Don't pay store prices on this stuff, either. Go into the stores to do your research, but you can either make an under the counter deal using one of the salesperson's discounts

(I used to work at an electronics chain, the discounts on this stuff is huge! At, or below cost, most of the time, which on some stuff is around 50% off). Or for a slightly higher price, you can get your stuff from a wholesale place online, there are lot of them. Happy Hunting!