2nd Best of Under $300 Home Theatre Systems.

Between April-June 2008, I tested all following under $300 systems (in alphabetical order):
JVC HT-G40
LG LHT854
Panasonic SC-PT660
Philips HTS-3565
Philips HTS-6600
Philips HTS-3566
Samsung HT-Z310
Samsung HT-Z410


Despite first HTS-3565 being defective (froze in STANDBY MODE), the sound was so much better than other brands, I gave it a second chance. This one froze too. I suspected static electricity (a problem in dry Southern Nevada). Unplugged unit. This seemed to restore things to normal.

I believe it is currently the 2nd BEST home theatre system you can buy for under $300.

Here's why ...

Sound quality Out of ALL the other systems I tested, only the Philips HTS-3565 and LG LHT854 produce 5.1 surround sound when watching live HDTV. Without adjusting ANY of the volume or balance controls, sounds great from anywhere in my 14x22 foot master suite.
Video Upconverts DVD to 1080p with excellent picture quality. Same quality applies when watching a DVD from my Samsung DVDR via HDMI connection.
Plays DVDs in MP4, AVI or VOB formats. Although the Philips website says you must be the HTS-3566 to play MP4 disks, I tested 3 and they all play perfectly. Found it interesting that my current "top of the line" Samsung DVD-AR650 DVD recorder won't play the same MP4, AVI or VOB disks that work perfectly in this Philips.
Sleek design. Piano black glossy finish on main unit matches my Samsung DLP TV, DVDR and VCR. Headphone jack (mini RCA) and USB input are nicely hidden behind a little flip open door on right side of front panel. Two round control dials on front function like an iPod control. One has a button in center to manually change input modes.
FASTEST DVD/CD Tray If you test or own any other DVD player, recorder or Home Theatre System you might be frustrated by the amount of time it takes to load or unload a disk. Multi-disk changers seem to take the longest, which is why I opted for a single-disk system. This Philips responds as fast as a CD/DVD tray on your computer.
iPod Dock. Nice-looking dock holds your iPod or iPhone upright so you can see the screen from across a room. Interface will work with your TV so you can select and play tunes using the Philips remote.
Universal Remote Friendly I have Logitech Harmony One and had no trouble programming it to run the HTS-3565 functions.
HDMI CEC If you connect unit using an HDMI cable or via the Digital audio input, this function should automatically turn on your TV or other component and change that mode so they work together.
Delivers excellent 5.1 sound quality when left in the AUX1 mode for watching live TV or recorded TV from DVDR.

CONS

Aside from first unit being defective, my only other issues are the speaker wire configurations and Coaxial Digital Audio input. Speaker wires are permanently attached to each speaker with a proprietary plug that snaps into back of main unit. With my pre-wired room, this forced me to do a bunch of cutting and splicing.

Coaxial audio input is not same as Optical (Toslink) on most TV or DVD equipment today. You may need to buy an Optical to Coaxial Converter which can cost up to $80. Best price I found was at MonoPrice for about $15 delivered.

If I discover any other relevant info, I will update this review.

UPDATE: 5/16/08. Just like the first unit I returned to Wal-Mart, this one seems destined to same fate. Today it suddenly froze. Wouldn't produce ANY sound. Tried to turn off/on and it froze in the STANDBY mode. I unplugged it and it's now working again. Dear Philips: Your HTS-3565 doesn't like static electricity.

UPDATE: 6/3/08. Received & tested JVC HT-G40. Huge disappointment. It won't play any DVD recorded in MP4, VOB or DVD-Video formats (all formats that other HTS systems easily play). Included worst user guide and on-screen interface I've seen in years.

UPDATE: 6/4/08. While shopping for food at the membership warehouse that begins with C and rhymes with Mostco, ran across the HTS-3566D/37 which is an upgrade from the HTS-3565. Philips website says that the only differences in the 3566 are supposedly hi-boy rear speakers, slightly better audio range and ability to boost some video to 720 or 1080. However I found a number of other noticeable improvements and the price for the HTS-3566 was actually $2 lower. With a couple of hours to spare, I dashed home, repacked the HTS-3565, returned it and bought the HTS-3566. You can read my review of it to see all the differences I found, some of which Philips doesn't mention on their website or in the manuals. I'll post the HTS-3566 review as soon as the Epinion Gods add it to this website. I can say after only 3 days of use, I am loving the HTS-3566 and the the hi-boy speakers produce the best mid-range and tweeter sounds I've heard from any speakers in a long time (including my former & expensive Bose system).