Home Theater Processor or Dedicated Preamp?

This question must have been asked frequently but I couldn't find any thread that talks about this so here it is again, hoping that someone can shed some light.

My preference is 95% music and 5% movie.

My current set up consists of a pair of Martin Logan Aerius (to be upgraded to a larger ML model), an Adcom GTP-500 preamp, Marantz DV6400 player, and Acurus 5x125W amp.

I'm considering the following (All used Audiogon prices):
1. (budget $800)Preamp/Processor: Krell HTS2, Proceed AVP or should I go with a dedicated Preamp and if so which one is the best for my budget?
2. (budget $1000)Amp: 250-300W (8-ohm) 2-channel
3. (budget $400)CD/DVD player: Emotiva, Oppo, or anything else?

Any help would be greatly appreciated.
i went from a theta casablanca pre/pro to a dedicated 2-channel preamp... no camparison. the 2-ch pre was better in every way. much better.

i started with a counterpoint, recently moved to an aesthetix calypso for the HT bypass. as good as the counterpoint was, the aesthetix is even better.

if music is your priority, i've yet to find a HT pre/pro that could keep up with a decent 2-ch preamp.
For my money, I use a less expensive receiver, an Onkyo that has every decoder built in, and a nice pre, Modwright, with HT bypass. When I use the Onkyo for movies and SACD, it works fine and is affordable and reliable. I listen mostly to music, so usually the receiver is off. I have a limited number of SACD and DVD-A discs.
I don't see any reason to change the source unless you're looking to play additional formats, especially if you go the AV prepro route and ignore the analog section of the source player, i.e., use the digital audio out from the player.

I assume you're using 4 channels of the 5 channel amp to passively bi-amp the Logans. I would continue to do that.

I'm in the camp that believes the room has a larger impact on sonics than electronics, so I vote for a good AV prepro with respected room mode correction like Audyssey. Either Integra or Marantz are good choices.