Well, first off, give us a budget range. Tell us how much you would like to spend and how much you are willing to spend should this cost more than you expected.
I'll start this out by pointing out that unless you are a bass-head, 500 watts is overkill for competing against the stock stereo's power. If you want 500 watts of bass, you will need at least 50-75 watts per channel to the front speakers from an external amp. Now here are some other basic facts. Power = Volume = Money. SQ is relative to power but it is not a direct relationship since at low volume you can have a great sounding system using low power. Low volume is also relative...amplifying speakers with any aftermarket external amp is going to be louder and better sounding than stock. Having a hatch back also gives you an advantage over sedan owners. All the bass you create will be in the cabin instead of the trunk.
You can read through the rear-speaker discussion and the $1000 audio challenge threads for some ideas but in my honest opinion, the true budget system will consist of the following:
A Factory head unit (FREE)
- The Protege head unit isn't half bad (especially w/ 6-disc changer)
- You can always upgrade the head unit later if you don't like how it sounds
- Thieves look for head units...if they see a factory unit they will pass right by your car.
A 4-channel amp ($200-500)
- 50 to 100 watts RMS x 4
- highpass crossover for front channels
- lowpass crossover for rear channels
- optional speaker level inputs
A single subwoofer ($150-300)
- 200-300 watts RMS
- 4ohm total load (depending on amp)
- to determine preferred size it's 70% how much cargo space you are willing to sacrifice and 30% listening style
A set of component speakers ($150+)
- 75-125 watts RMS
- 5x7/6x8" or 6.5" works best
- separate crossover
- can be coaxial as long as they have the crossover
Installation materials ($50-100)
- Line out converter (if amp doesn't have speaker-level inputs)
- 8ga amp wiring kit (with RCAs if amp doesn't have speaker-level inputs)
- speaker wire (sometimes included with wiring kit)
- subwoofer box
- misc mounting hardware, zip ties, etc
The place where your money goes the farthest is with the components. Once you have 50-100 watts to work with, things only sound better when budget more money for the components. Although most of the stuff you can buy online based on specs and recommendations, the components you will need to audition especially when you are not sure how much you want to spend.
Go to several stores with a CD containing the different things you listen to. Ask the sales person to turn off all processors and subwoofers so you can try out just the speakers. Bring a notepad so you can write down the price and model number. Listen to them all (including some non-component coaxial speakers) until you have a feel for what you like. Stand in between the speakers (maybe off to the side a little as if you were in your car) and close your eyes. Picture the musicians on a stage in front of you.
There are different tweeters (soft silk dome vs metal dome, aluminum, titanium, etc) which affect the high end. Many people like the silk dome because it offers a smooth response that won't tire your ear while others like the metal dome because they are more crisp and respond better through the higher registers. You should also notice a difference in midbass between woofers. Some will be loud and tight while others will be soft and subtle. However, the most important thing is how the components work together. Listen to a male vocalist and a female vocalist...how do they sound? If you chose songs that you know well, you should be able to answer this question. How about when you turn the volume up...do their voices change drastically?Sometimes listening to the songs on a set of nice headphones before you go to the store is a good way to get a reference point in your head. Anyway, once you decide what you like...go back and decide what you can afford. If the difference between two sets is minimal in your ear, maybe you don't need to spend the extra money. If you think they all sound good...chance are you'll be happy with the cheapest set.