This one is easy. I wrote the articles on Audio Review, so I should know. All of the major bugs have been removed from the original HTS and the HTS 2 has analog bypass. You can remove the MC-1 from this equasion. Not only does it sound horrible in 2 channel stereo, it has no analog bypass or balanced inputs. Both Krells and the Proceed have balanced connections but, only the HTS2 and the proceed have analog bypass. The Krell is an all around hands down winner. The proceed was built 5 years ago and hasn't changed much since. It only has 3 balanced channels, F,C,R to all 6 balanced by Krell. Krell has also announced 7.1 balanced. The new Krell is unquestionably the better piece. Whether or not the "proceed 2" will be better is yet to be seen/heard.