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Hey mlitz,
You are on the right track. By changing the receiver and the speakers alone, you can dramatically improve the audio system in your ZX2 well within your budget. Here are some important things to keep in mind when shopping to the right system to fit your needs.
1. Start by making a list of the features and functions you would like the new receiver to be capable of. It may be as simple as just a straight forward AM/FM CD player, or maybe something more integrated such as satellite radio or iPod integration capability.
2. Enter your vehicle into the online vehicle selector guide here:
http://www.crutchfield.com/whatfits
3. Take a look at which receivers are listed to fit your vehicle and match your needs you decided on earlier. A very helpful thing to look at here are the customer reviews and ratings. These are submitted by customers just like yourself who have used these products first hand and can speak from experience. Hopefully some other people will chime in here, but some of my favorite brands include Alpine, Pioneer and Kenwood, Alpine being my personal favorite. The forums here may be new, but you'll already find some praises of certain brands and models posted here.
4. Once you select a receiver, it's time to move on to the speakers. An important thing to look for here is the speakers "sensitivity" level. This is measured in "db" or decibels. The higher this number is the better. This means the speaker is more efficient and will make better use of the power presented to it from your new receiver. This will help with clarity at all volume levels. Again, take a look at the customer reviews, but remember that this is probably the most subjective of all products since everyone’s ears are different and taste may dictate that while one person loves a crisp bright high end, another may prefer a more smooth warm tone overall. If you can, try to get some where that you can give the speakers you are interested in a listen. If you can't do that, gather the info you can from other people online in places such as the forums here to try and hone down the pick that should meet your taste. Worse comes to worse, you can always return or exchange the speakers if they just aren't right for you.
Hopefully this helps to get you started. Please share your questions or experiences with us here at the community forums. We'd love to hear your progress.
what about this setup http://www.crutchfield.com/S-5bZ6rqYo2Q5/cgi-bin/prodview.asp?i=500CDE9852&s=0&cc=01 and http://www.crutchfield.com/S-5bZ6rqYo2Q5/cgi-bin/prodview.asp?i=1086012SI&s=0&cc=01 i also am wondering about http://www.crutchfield.com/S-5bZ6rqYo2Q5/cgi-bin/ProdView.asp?g=400&I=107DB5250 for my rear deck? what are those square things and will i need those extra tweeters?
To start, I should have made mention about the component designs, such as the Polk speakers you posted for the rear. Basically, this design simply seperates the tweeter from the "pole piece" of the speakers woofer (if you look at the Infinity speakers you linked to, you'll notice a tweeter mounted in the center). This is a more advanced design that requires a bit more attention. First, you will have to add an amplifier to appropriately power the speaker (even though it is highly sensitive, the crossovers add extra resistance and the speaker wants to see more power than it's "coaxial" counterpart). Also, you will need to do some modifications to the vehicle to mount the tweeter using either a surface mount of cutting the rear deck for a flush mount. Based on what you are trying to accomplish, I don't recommend going this route. Since the rear speakers in the 1998 ZX2 are 6"x8" speakers, I recommend matching up to the front Infinity selection with the Infinity Reference 6822cf. I feel the Infinity was an excellent choice for the front and this will be a great balance to compliment it in the rear.
Infinity Reference 6822cf
As for the receiver, I'd like to know first what functions you are looking to receive from this unit. For example, are you trying to use an iPod? Are you wanting to connect anything else to it such as a CD changer, satellite radio, etc. even if not until a bit further down the road?
I like the Infinity speakers you picked for the fronts and Malcolm picked for the rear.
I purchased two head units recently, a Pioneer DEH-P4800MP and a Panasonic CQ-C3305U for a car I'm trying to sell. The Pioneer was a end of year clearance but the Panasonic is still available. I like the Panasonc because it has a front iPod jack, MP3/WMA capabilites, lots of pre-amp outs if you want to add subs or external amps, satellite radio controls and plenty of power for aftermarket speakers (I hooked up an set of Kenwoods in the rear deck, they sound good).
My Pioneer has two rear AUX inputs (one has my plug and play Sirius satellite in it), 3 preamp outs, subwoofer controls and low/hi pass filters and MP3/WMA reading. I run a set of component Kenwoods and 3-way Pioneers off of the head unit's interal amp and it sounds great! Comparable to my head unit would be the Pioneer DEH-3900MP and DEH-P4900iB, both have optional iPod control cables (as does the Panasonic).
I would recommend any of these three head units, all under $200.
I used to own a 99 ZX2, and I remember it has the odd shaped dash with the radio and heat/ AC controls in it. Remember that you have to purchase the mounting kit, I copied this off one of the head units install pages.