The approach you are considering will work, but the hook-up process may be a little complex. Another approach, which many people with 2-channel systems have used to get into HT, is to buy an outboard surround processor and a 3-channel power amp (for the center and surround speakers).
I have helped several people install the Technics SH-AC500D Surround Processor, which provides Dolby Digital 5.1, DTS, and ProLogic decoding. The unit also provides a pass-through circuit that lets you operate your 2-channel system without running the signal through the digital circuits. This model can be purchased discounted for under $300. My son has one of these units in his HT setup, and I've been impressed with its performance for such a low price.
If you decide to get an outboard processor, you will need an external 3-channel power amp. There are a number of moderately priced amps, such as the ones made by Adcom (used 5503's sell on A-gon for around $600-650) and Rotel, and if you really need to save some money, the amps made by AudioSource have gotten pretty good writeups by non-highend audio mags.
I have helped several people install the Technics SH-AC500D Surround Processor, which provides Dolby Digital 5.1, DTS, and ProLogic decoding. The unit also provides a pass-through circuit that lets you operate your 2-channel system without running the signal through the digital circuits. This model can be purchased discounted for under $300. My son has one of these units in his HT setup, and I've been impressed with its performance for such a low price.
If you decide to get an outboard processor, you will need an external 3-channel power amp. There are a number of moderately priced amps, such as the ones made by Adcom (used 5503's sell on A-gon for around $600-650) and Rotel, and if you really need to save some money, the amps made by AudioSource have gotten pretty good writeups by non-highend audio mags.