Source - Dolby Labs
5.1 Setup
This system has six channels: five full-range channels, and a low-frequency effects channel (the .1 of 5.1) usually expressed through a subwoofer. Many DVDs and digital broadcasts feature a Dolby® Digital (5.1) soundtrack, so this will give you optimum sound for most programming. It also most closely approximates the sound in most cinemas.

I will make the assumption that you have a surround sound or home theater receiver and start from there. There are 3 main home theater speaker setups which you will see termed 5.1, 6.1, and 7.1 channel surround. You will also see mentioned the terms Dolby Digital, DTS, and Dolby Pro Logic. Let's dispense with the latter first: if your receiver is only Pro Logic (only older receivers at this point) you do not need to worry about 6.1 or 7.1 surround. There are some other formats such as Dolby Digital EX, Dolby Pro-logic IIx, Dolby TrueHD, DTS neo:6.1, DTS-ES, True-Surround XT, and undoubtedly more.
The two factors to consider are:
1. how many channels does your system permit, and
2. Do you want to buy that many speakers?

Home Theatre buyers guide.Among the many characteristics that define an audio system, only a relatively small number are really important to making a good buying decision. Here are the key specifications for a home theater audio system. We've divided them into three groups: important, somewhat important, and minor.
Surround Decoding
The surround-sound formats supported by the system will affect the realism and intensity of the experience.
Dolby Pro Logic: base-level surround decoding that will work with essentially any source. Generates front left and right, center, and surround outputs (with the mono surround output normally reproduced through two speakers). Works well only with Dolby Surround-encoded soundtracks. This or Dolby Pro Logic II is an essential feature.
Dolby Pro Logic II: an advanced version of Dolby Pro Logic that is starting to come into wide use. It provides superior surround decoding with stereo surround output.

Selecting and buying the right LCD TV for you depends on several factors price and size being the two most important. LCD televisions can be tricky to figure out, but once you get used to some of the terminology as you shop you?ll become more familiar with the different brands and size ranges. Choosing a size for your home first and foremost has to do with space; how much space do you have available and how big a screen do you want.....

The optimum TV screen size is directly related to the available viewing distance – but there are other factors as well that need to be taken into consideration.Sit too close to your big screen TV and you will be able to see the image build-up structure