In market for AVR and need suggestions

HT setup was on hold for awhile but now back on the front burner. My primary source of entertainment is 2 channel stereo and have a nice setup. So, 2 channel rig is on one side of cabinet the AVR will be on the other along with my Denon 3910 dvd player. I will use the cinema BP on the Cary Integrated amp. I will watch movie and/or concert on the weekend with normal cable TV viewing during the week. I have bought used equipment off AG in the past always with success. I thinking / hoping I can pick up a nice used receiver for $1000.00 or less.

Any advice would be greatly appreciated.
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5.1 or 7.1? HDMI video switching? Room correction?
Since you're fine w/ buying off AG, did you check the Denon receivers currently in the Miscellaneous:Receiver section? And while you're there, maybe consider the Pioneer (it's listed in the header as a 49-txh but the body of the listing describes a new 94). I think places like 6thAve & Vanns run deals on clearing out recent receivers (Yamaha & Onkyo) - 1/2 price on a few, and even less w/ the occasional sale (my son picked up a new Yamaha 861 under 400 shipped...). Practically any of those processors offer plenty of features & capability and if you really need to you could always add an amp.
I would get something with HDMI inputs/outputs to make it more future proof, since that's the way all dvd/blu-ray players are going. Also, many current AVR's in your price range have Audyssey room correction which is nice. I would look at the Onkyo 805, which has all the bells and whistles and, since its at the end of its life cycle, can be found new in the $600-700 range, if not less. The Denon 3808ci is nice, but will be just over your budget new. How much power do you think you need? The two I reference have 130w per channel. If you can use less, then the options are greater within your budget.
I want HDMI. I will only be running 5.1 (center, two mains and two rears). My JM Lab Electras don't need tons of power but would like to have aleast 100wpc at 5.1
My suggestion is to pass on the HDMI switching. Unless you want to use your AVR's remote to control everything or upconvert with software in the AVR (only the most expensive have this feature). Video switching in my experience is not as easy as propagated. Most cable boxes that I have used have not been compatible.

This will allow you to shop for the real deals which are the 5.1 receivers and processors.

I'm a little confused as to how your going to set this up but I think you are going to use your Cary to power the front 2 speakers. So that only leaves you 3 speakers to power.

You could just use three amps in the receiver or... You could do something like this:

B&K Reference 50... Item # 1232213216 on Audiogon
paired w something like this:
B&K ST3140 3 Channel amp Item # 1231890788 on Audiogon

I have no affiliation to these sellers, just throwing out some suggestions.

The problem with the processor/amp route is adding 8 more cables.. 6 interconnects and 2 power cords. That could easily cost you another $500.

Oh the problems of the rich and famous... good luck and let us know what you end up doing.