If you're just starting to look into a home cinema type set up, can anyone give me an idea what are the main areas to look at?

Limited budget - and also not worried about getting a massive screen our room isn't that big. Just something reasonable.

Speakers on a limited budget go for an AV speaker pack (maybe sub+sattelite package if space is tight). TV depends on size and cash, but I find for flat and for the price the quality of LCD beats plasma on small sizes. Otherwise stick with a decent CRT television a lot cheaper for the picture quality.

Are you after the whole package - dvd, amp etc or do you have some equipment to work with?

Interestingly I have a TV. Never imagined I'd keep that in the set up though. I was imagining maybe there were package deals.

There are a lot of packages for dvd+amp+speakers or av speaker packs, none that I am aware of including a tv (unless the 5.1 setup is built in the set with external speakers provided). Probably worth thinking about where you want to spend the money, decide on whether your preference is on improving the audio or visual experience?

The audio is clearly the cheaper upgrade, especially since you have an existing tv.