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I have a separate 2 channel music system, and a separate small 5.1 home theater, at either end of the same room. (shown in my System photos here). I love both.
A Home Theater, small or large, you will have at least 5.1, thus an AVR with remote control with audio mode options, including a 2 channel stereo mode. That's it, don't make listening to Stereo via a HT more complicated than that.
Surround sound when properly done is great, I leave the AVR on 'Direct', it senses the coding, however I frequently change/force my surround sound receiver to 2 channel mode and it often sounds better. Much is pseudo surround and much is simply poorly done. That's just a menu change via remote control (and remembering to try it).
IMO, in a Home Theater, Imaging is more critical than Sound Quality/Frequency Extension.
L/C/R Imaging over a Wide Area is a big part of
the solution when video is involved, or, when listening to 2 channel with a
friend
2 Channel System: I listen from a dedicated center
spot (often Donna’s listening from the sofa). OR, with a friend: toe-in
adjusted for preservation of L/C/R imaging over an area wide enough for two chairs with a small snack (think drink) table in the middle. All my chairs/tables have felt feet, spin and slide this way and that.
Home Theater: The video system gets the most use.
Sound makes a big difference to involvement with video, (whether it is 2
channel, true surround, or pseudo surround). Mostly it is Donna and I at
opposite ends of the sofa with our own end tables, coffee warmers, drink
coasters, charging wires, feet up ... or more people: someone in the middle,
some others off on one or both sides.
My DBX Soundfield 100 speakers and their method of creating imaging L/C/R over a very wide angle is paramount to successful involvement/enjoyment.
http://www.hifi-classic.net/review/dbx-soundfield-100-135.html
We stream and record a lot of musical shows: The
Voice (all over the world); The Voice Kids (also all over the world, except usa); American Idol; Songland; Award Shows; Concerts; AXYS; Pandora; World of
Dance; musicians at the end of Jimmy, James, Jimmy, Stephen .... not
me, but sound is important for Donna watching Dancing with the Stars, country friggin music shows ....
My wife's twin sister house/pet sits for a lot of
wealthy people, a few days, 2 week vacations ….. We often visit, see big tvs,
expensive furniture, custom woodwork, small speakers, missing center speakers, no decent sound, poor glare control, ... I
just shake my head sadly and can't wait to get back home!