Don't go through the 550. You will lose some resolution. I would set the volume on the sub for the MD208. Period. The 550 should have adjustable sub levels. Use the 550's controls to set its output to the sub.
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Muskrat, does the HGS12 have an additional input that bypasses the crossover and/or gain control?
I'm using an AV500 for my HT and also have a separate 2 channel system in the same room. Both systems share a common NHT SW3P passive sub that I'm powering with one channel of a Bryston 4B.
For movies the AV550 runs directly to the Bryston from the LFE output. I use the AV550 sub out levels to control the volume. With the AV550 LFE is set at 100Hz only so there isn't much tuning to do.
For two channel I have RCAs running from a Y-spliiter at my preamp outs to a Paradigm X30 which in turn runs to the Bryston. I control gain and crossover at the X30.
When switching between HT and music all I do is change connections behind the Bryston. I don't have to adjust levels or crossover.
Originally, I was using the NHT SA3 amp which is made for the SW3P, but it only had one set of inputs so crossover and gain had to be readjusted every time when switching between HT and 2 channel. I no longer have to deal with that, and a big bonus is that the Bryston creates much better bass and exerts far better control than the SA3.
That's why I ask if the HGS12 had a second set of inputs that bypassed the internal gain and crossover.