Plus most flat screen TV's have various screen modes; cinema, ultra, game, etc. As for clutter, my set-up is very simple - wall mounted plasma TV, amplifier and PC tower - everything is done through the computer. You may want to consider going for a PC upgrade instead.
I have a HD graphics card which powers the TV and three separate flatscreen monitors. You can either download blu-ray rips as I say, or you can get a Blu-Ray drive for your computer. No idea on prices but it's the simpler option.
This way I can play all of my PC games on the TV too

I have 2 xbox handsets with USB adapters. Sound wise I have a very nice optical sound card to a 5.1 amplifier, being front left and right, back left and right, a centre speaker and a subwoofer.
Antec Twelve Hundred V3 Ultimate Gamer Case

Antec CP 850W Modular ATX Power Supply

Intel Core2 Quad Processor Q6600 CPU

Corsair XMS 6400 DDR2 2GB RAM [x4]

Asus P5Q Deluxe S775 Motherboard

Asus Xonar D2X PCI-E Sound Card

Sapphire AMD Radeon HD 6970 2048MB GDDR5 Graphics Card

Novatech 4 Port PCI SATA Adapter Raid Card

OCZ Agility 3 SATA III 2.5" 60GB Solid State Hard Drive

Samsung Spin Point F4EG EcoGreen SATAII 2TB 32MB Cache Hard Drive [x9]

LiteOn IHAP122-19 22x DVD+/-RW IDE Black - OEM DVD Writer [x2]

Lindy Mini-DisplayPort to VGA Active Adapter [x2]

Novatech LED Illuminated Keyboard

Logitech MX518 Gaming Mouse

Mad Catz Xbox 360 GamePad [x2]

Trust 15356 Stylus Design Tablet

Microsoft Lifecam VX-3000

Mustek ScanExpress A3 USB Scanner

Hewlett Packard Deskjet 2050 All-in-One Printer

Sony STR-DH500 Amplifier

Technics SB-CS55 Speakers [x4]

Eltax Rumble Subwoofer

KEF Cresta Centre Speaker

Acer V193 HQDOB 19" Monitor [x3]

LG 42PT353K 42-inch Widescreen HD Ready 600Hz Plasma TV