Is that an outside wall? If not you could always run most of the wires down the nearest stud (near your light switch) and run them down to the floor, then along the baseboards.
A less elegant, but effective solution is wall mounted covers.
http://www.homedepot.com/webapp/wcs/...THDPlsLocalize
A separate/receiver/blue ray would certainly clean things up, as you'd only need an HDMI cable going from your cabinet to the tv. Finding something sub-$800 is tough (unless you want to go used) but doable. Here's one example (although you'd still need a blu-ray).
http://www.costco.ca/Yamaha%C2%AE-RX....10365902.html
Another option is to go with a soundbar instead of speakers (not an option I'd use, but they're quite popular). Keeps the speaker wiring to a minimum.
How much room do you have where the cabinet is? Here's the cheap option I went with :
http://www.ikea.com/ca/en/catalog/products/20218442/
You can get them double or triple wide, and to clean it up you can add an IR receiver and put doors on the cabinet. They need a bit of modifying to use for home theatre gear, but a drill and some computer fans made a much cheaper solution than buying an actual home theatre cabinet.
Here's a pic in the midst of modifying them:
There's also the HT Megathread which showcases some other member's theatres and may have something of interest to you:
http://forumcdn.calgarypuck.com/show...t=89137&page=6