I got my first 5.1 system at wally world for about $250. The Panasonic you linked is far superior. Whatever unit you get, make sure the I/Os match your other equipment. I see that Pan. has the optical digital input which you will need to feed the DD5.1SS signal from the 211 into the audio system. The 211 will also do that over HDMI but apparently the Pan. does not have HDMI inputs, or any video inputs for that matter, so you will end up connecting the 211 directly to your TV for the video, hopefully by HDMI. (The XBox will also have to go to the TV.) The only possible consequence of that arrangement is that there might be an A/V sync issue and I don't see anywhere this system gives you any way to resolve that. (But there could be a sync control feature in the Pan. not mentioned in the specs.)
The real downside to this approach (as I have learned!) is it's almost impossible to expand, as jayn_j alluded. Perhaps if your TV has multiple video inputs (preferrably HDMI) and an optical output, you can use the TV to do the switching if you pick up other sources like a BD player. And then the XBox could also feed a SS audio signal to your system via the TV.
Good luck with your system! Warning - It gets very addictive and thus expensive! I went from about $3,500 invested in just a TV and HTiB about 2 years ago to over $15K now, and that's only considered a "mid range" system. I think I'll park here for awhile, tho'...!
