From the specification sheet for the ZHX-313 from the Zenith website, we can
see that the home theater system in question has, among other capabilities,
Dolby Digital 5.1 channel decoding.
As you, quite correctly point out, the system has a composite left and right
audio inputs. The ZHX-313 will take a Dolby 5.1 signal from that input and
process it just fine.
This all depends on the source of your input carrying a Dolby 5.1 signal, so
the real question actually is whether your television source carries a Dolby
5.1 signal. If it is cable or one of the "little dishes," then chances are
your source does carry a 5.1 signal.
Even though it is on the increase, a large percentage of media just doesn't
have Dolby 5.1 audio as well, so don't be surprised if the Dolby Prologic II
and DTS capabilities of the ZHX-313 come into play. These are other ways
that all of the speakers get used.
Since you mention using this system within an HDTV environment, I would
suggest you increase your budget and get a system that has at least component
and digital inputs. As you know, the ZHX-313 has neither, so I don't think
you will be satisfied with the ZHX-313 in a HDTV situation.
Here are some other systems to consider.
Please note that the Sony has HDMI input/outputs, which is even better for
You will notice that neither of the above have VHS or DVD capabilities, as
I would recommend you get a separate box for that.
If you need any clarification, please feel free to ask.
Google search on: home theater in a box HDTV
Google search on: home theater in a box HDMI
Personal experience of having upgraded my own sound and video systems several
times over the past 12 years.
Looking Forward, denco-ga - Google Answers Researcher