Hi Scott,
I would get myself down to Richer sounds and have a chat. It looks to me as if you can get some good separates for a bit over your £200. If you do go the separates route you have some "proper" hi-fi and you can upgrade one bit at a time.That way you can identify the weak points in your set-up and get a kick out of just changing a bit of speaker cable! You won't get a sub woofer in that budget but something like Gale monitors (£80) positioned close to a wall can pack a pretty mighty punch.
I started out along the same lines and my system has slowly worked its way up to something very nice indeed. Bits of my original system are still rocking the summer house. (Always put a bit aside, to make sure you can buy a house with no neighbours :0 )