I'm no expert on all of the different surround formats (many of which are just marketing gimmicks!), but I do have a recommendation for a great inexpensive HT receiver.
The Pioneer VSX-1014TK or VSX-1015TK are truely excellent considering their street price of about $350 or less. I own the 1014TK and I really like it. It is THX Select certified if that is important to you. The build quality is excellent (it is supposedly nearly identical to one of the ELITE models) and it sounds great for the price.
I've owned about 10 different HT receivers over the last 5 years, ranging in price from about $250 to $2800. The Pioneer VSX-1014TK is not the absolute best that I've owned, but I do feel that it is easily the best value.
The 1015TK adds THX-Select-2 (supposedly the World's first receiver to offer this new THX cert) and it has DPL-IIx. Like the 1014TK, it also has an automatic surround setup feature called MCACC which uses a microphone to calibrate the receiver/speakers for correct setup, in your room!
These 2 Pioneers are seriously good receivers and probably meet all of the needs of 99+% of the HT buying public. That last one percent can go out and spend hundred (or thousands) of dollars more to get the last little bit of extra performance.