Audio treatments are important, but not expensive. simple cheap carpet on the walls in panels make a GIANT difference. even hanging drapes like they do in commercial theaters is cheap and very effective.

finally "separates" never makes it sound better, just more expensive. Most all in one surround sound receivers today are fantastic. if you need the separates to impress friends, go for it.. but you will not sound better. Spend the money on speakers to sound better. the newer recievers that have a microphone to auto tune the room do a better job than a $1000.00 an hour expert can. Typically 50% to 60% of your budget should go to speakers for the best sound. Look for lower cost high end brands like RBH.