Apparently, some Tesco stores are doing the current Sony-S380 BD player at the moment for £50 which is a great price, if you can locate one. Any of the Sony players (including some of the previous year models) would be worth going for and there are bargains to be had on them if you shop around.
As for surround, you may want to consider a slightly left-field suggestion of a "soundbar" solution - for example, the
Yamaha YHTS401. This keeps everything together in one unit and will give a reasonable* surround sound experience. Upside is that you don't need to trail cables around the room and place a myriad of speakers which isn't always easy but the downside (*) is that the surround experience may be less satisfactory than a full-on separates setup but it depends on a lot of factors, not least the positioning of the soundbar and the shape of your room. If you have a local RS store, maybe you could audition it - they may also be able to help with your question with putting together a £500 deal?
edit: useful AVF
thread with people "reviewing" their new Yamaha soundbars.