In one of the vexing semantic peculiarities of the consumer electronics (CE) business, the words home theater don't necessarily mean what they imply. To most people, a home theater is just that, a tricked-out room, often modeled after great movie houses of yesteryear, with state-of-the-art video, sound, and seating.
But in the CE business, a home theater is the sound system, sometimes including a DVD player, radio tuner, and now even media storage capability. Its main feature is its ability to faithfully reproduce the multi-channel digital sound formats that produce surround sound, which travel under the monikers of Dolby Digital or DTS and include at least six channels (5.1, meaning five speakers arrayed around the viewer and one subwoofer) and up to 10 for large rooms.
Home theater systems, at least those that include a DVD player (or home-theater-in-a-box), are undergoing a rapid evolution, owing largely to the introduction of high-definition DVDs this year. Two formats compete for these new DVDs (remember Beta vs. VHS?): Blu-Ray, developed by a CE consortium led by Sony, and HD-DVD, developed by another consortium led by Toshiba. The Sony group claims its format—which can read up to 25 GB on a hard disk, or enough for a two-hour movie in high-def—is superior. But it's not compatible with standard-definition DVDs, which means your customers would have to maintain a separate player to use the DVDs in their libraries.
The Toshiba group's format is backwards-compatible, but it doesn't have the storage capacity of Blu-Ray. This could mean movies with lots of special features on the HD-DVD would have to be distributed on more than one disc. (All the major studios have committed to releasing product in both formats.)

DOUBLE DUTY: The Bose Lifestyle 48, 5.1-channel sound system doubles as a home theater sound source and music storage system.
Still, it might behoove builders to stay away from the format wars until they are settled by using dedicated DVD players as opposed to integrated sound processing/DVD playing systems.
Bose, for one, avoids the format issue by changing the subject with its Lifestyle 48, 5.1-channel home theater, which tops our charts (see page 52) in terms of price. It does this by offering a 340-hour music storage system, which is not common in home theaters.
Both the 48, and its little brother, the 38, employ the recently released uMusic system, which digitally stores a music collection and also prioritizes it according to “likes, dislikes, and even mood.” The system also can be linked into a whole-house audio network.
Verne Gay is a television columnist at Newsday.