Moving From AVR to Amp

Relative newbie here so please excuse my lack of knowledge. I am assembling a system for HT and music (70/30 respectively). My room is 29x12, viewing/listening position is about 8-10 feet from the front speakers. I started a couple of years ago with Totem Forests, Model 1 center and Lynks rears, Velo SPL-1500R sub. in a 5.1 set up. I have been using an Onkyo TX-SR805 and a Squeezebox just to start while I gradually build my system. I recently added a media center PC built by a friend, that I use mainly for streaming movies and as a blu-ray player. I am thinking of (1) adding a separate multichannel amp (either 5 or 7 channel) and using the AVR as a pre/pro for a while, (2) getting a good stand alone DVD/CD player now, and then adding separate components in the next year or two. I am budgeting roughly $3,000-$4,000 (including interconnects) in this phase of the upgrade. Used but well cared for equipment is fine with me to maximize the value of my system. My questions, before I go listening/shopping: Is this a reasonable way to upgrade? Would I be better off selling the AVR and starting from scratch? What amps should I consider? Is it better to get a 5 channel amp for now and add a separate amp if I go to a 7.1 set up later? Sorry for the long post, but there seems to be alot of info to sort through and I am trying to learn.
Well, your Onkyo is clearly the weak link - both as a pre-amp and as an amp. I'd be inclined to drop the Onkyo and look for a decent pre/pro + power amp. Maybe a gently used Anthem, Classe, Cary or similar.

Just adding a power amp to the Onkyo will help drive the Totems properly, but won't likely improve the overall sound quality a great deal.

As far as getting a good stand alone DVD/CD player, I don't think such a thing exists - that will play Blueray. If you are really into good CD sound, look for a decent CD only player and either keep what you've got for blueray, or get a cheap blue ray player as well.

For 5 vs. 7 channel, except for the odd blue ray disc I doubt having more than 5 channels is worth it. Personally 5 channels is plenty for me. Of course, if you are set on it, go for the 7 channel - it's likely a lot cheaper than adding another 2 channel amp later + power cord etc.

Just my pov
I second the moving from AVR to seperates, dump the Onkyo.

I would look to buying a very good pre HDMI pre-pro and let your video be switched at the TV level, if that's possible. Have the BluRay player decode the surround modes from movies, and send the sound via analog cables to the pre-pro.

For the disc player, don't do it. I would buy a good Oppo BluRay player for discs and seperate DAC.

for your $4000 budget hear's what I would do:

Parasound C2 ($1000) pre pro

Parsound 2205 AT ($750) Amp (great amp, will work well with your Totems)

Oppo BDP-93 ($499) plays everything

MHDT Havana DAC ($899) great tube DAC, hard to find used

Sonos ($369) download all your discs and run the music on here to the DAC, use a good digital interconnect.

all interconnects from Signal Cable for multichannel, and find some used Kimber Hero or Cardas for about $110 a pair to run from the DAC to the pre pro.

well, that's my $0.02
You have a great start with the Totems. If you're mostly interested in HT, then moving to a multichannel amp and pre/pro at this stage makes sense. If you're generally happy with your HT set up now, though, you might consider adding a nice 2-channel amp (keeping your AVR as the preamp). I'd bet that your Totems would begin to open up and sing on 2-channel material with just that change alone. You could then reassess and decide whether you want to add in a 3-channel amp for your rear and center speakers. There are a lot of great options for high quality, $800-1500 2-channel amps. Many folks here on AudiogoN use 2-channel pre-amps with home theater pass through options. You may want to look into that if you haven't considered.

If you are looking for good audio results (ie. 2-channel) as well (though for many that is not very immportant - if that's your case, disregard my recommendation completely), I would go with a decent 2-channel amp and also a 5-channel amp (just using 3 of the 5 channels for now - but having the other two available when going to 7.1/7.2)

I have never heard a multi-channel amp come close to sounding as good as a equal level 2-channel amp when it comes to stereo/2-channel music listening.

I have owned and auditioned some very good multi-channel amps - none of them could compare remotely with comparable 2-channel amps, including:

Krell TAS (better than most multis, but still not good enough - owned)
Theta Dreadnaught (lousy 2-channel performance - owned for 1 month, sold and the buyer sold w/in 2 weeks due to the same bad performance)
Halcro (okay in 2-channel at best - auditioned multiple times)
Krell KAV (mediocre in 2-channel - owned)
Conrad Johnson (okay in 2-channel - owned)
B&K (mediocre in 2-channel - owned)

Auditioned many others, not one has ever come close to performing above average for 2-channel performance. I am demanding for 2-channel, but not very much so for HT, I just don't watch enought TV/Movies. In the end, I have two completely different systems and am perfectly satisfied with a AVR and below average speakers for HT. Maybe its that Hollywood doesn't make any good movies anymore - IMO.

But that's just me and your goals may be different between 2-channel and HT.
Thanks for the suggestions.

Meiwan: Do you really think I won't hear a difference adding an amp but using the Onkyo as a pre/pro? Hmmm. I didn't expect that. I figured that since the processor portion would become outdated soonest and the AVR is only 2 years old, that I should focus on the amp now, make a long term investment in a good one, and then upgrade to a separate preamp and processor later. I will consider your advice.

Macdadtexas: I was considering the Oppo BDP-83SE or 93 as an all in one solution. That seems to be a favorite on avsforum too. I hadn't considered a DAC. My computer builder friend was going to set me up with a NAS and stream the music from that. Would the sound quality be much better using the Sonos and a DAC?

Ethos: While I don't intend to go to 7 channel any time soon, I figured a 7 channel amp would give me the capability to do so and in the mean time, I could bi-amp the main speakers with the extra 2 channels. I suppose that is one of my main questions - do I lok for a multichannel amp that can cover all needs or is it better to build gradually to that?
Post removed 
I have the same Onkyo 805, and I think it is quite good for HT. Plenty of power (130w/ch), Odessey room equalization, THX certified, 7.1 so you can biamp. That said, I have to agree with Ckoffend. A dedicated 2 channel amp for music is going to be much better that a multichannel amp.

BT, I wouldn't worry about balanced cables unless you have runs longer than 4 feet or so. You won't hear a difference.
What is your ultimate goal? Do you want your incremental investments to improve 2-channel performance? If that is the case, you may want to keep your ONKYO and look for a good 2-channel integrated amp with a HT pass-thru feature. This allows you to use your integrated to 100% drive 2-channel and then use your ONKYO in conjunction with the integrated with multichannel. $4K will brink you a BIG step up if you head in that direction.
I am concerned about 2 channel performance. That is what sold me on the Forests and is the main reason I am looking to upgrade. For my purposes, the HT set up is satisfactory. The Forests sound good to me but not as good as when I heard them in the store (which I expected). My thought is that a 5 channel amp now would improve overall performance and then I can add a separate 2 channel amp in time, better suited to maximizing the 2 channel. I know I have to listen carefully and compare, but was thinking of something like the Parasound Halo A51 to start with and then adding a separate 2 channel in a year or so. On that note, what is the best way to audition amps. Assuming the store I bought from still has the Forest on display, should I expect them to make several amps available to audition or is that not how it is done? How do you go about auditioning amps?
Theclam, I think that approach is good. For auditioning amps, working with your local dealer (ie. buying new), I suspect that they would only lend you one at a time, but would probably allow you to bring your speakers in (take a day off of work and do it on a slow day). The way I buy amps and want to determine between 2-3 that I have researched is to buy several of them used at the same time, at decent to good prices. This gives you more time, sell the ones you don't like as much. Yes, this requires more cash upfront, but my experience is that there is less second guessing when you have finally chosen. If you buy them at good prices used, then selling them for the same amount of money is not very hard to do. Worse case, if you buy 3 used, pick your favorite and sell the other 2 you may be out $200-$300, but at least you will be confident in your end decision.

Also, when you are ready, start another post and state where you live. You wouuld be surprised how helpful members are and I wouldn't be surprised if somebody was willing to lend you an amp for a week.

I have owned several pair of Totems (Arro, Hawk, Manni), the are very good speakers. With a decent amp they really can sound great and you do not need to spend a fortune on an amp to make them perform very well. Though I have found that a mediocre amp can really weaken their performance in the HF/treble area and at sound staging (one of their real strengths).
for digital audio the DAC is the most important component. Check the forums here, it's where your sound will eminate from.
personally, i'd (at least initially) keep the onkyo and your very good existing speaker config and get a three channel amp to power the fronts and center--perhaps something like a parasound or wyred4sound--i think you find signicancant improvement + save some $$. you can always change out pre/pro and/or add an additional amp later.
I also started with a Marantz AVR, moved to B&K Surround Processor plus a Gemstone 7-ch amp, and finally added a set of 2-ch gear. I have the same Velo SPL-1500R subwoofer. I concluded that I couldn't be happy with muti-channel gear for 2-ch music.

If I had to do it all over again, I would have just kept the AVR and added the 2-ch gear as the L/R channels since I cannot have dedicated rooms for HT and 2ch music. I am a music lover and I also like movies. I found most sound comes from the L/C/R channels for HT. If you off load the L/R channels to the 2-ch gear, the AVR is likely to be sufficient. Additionally, the Velo sub is 1,000W RMS (2,000W peak!), further reducing the demand to the AVR.

A key in this integrated HT/2CH is isolating the noises from the HT gear to the 2-ch gear. But that is another subject.
This is extremely helpful, thank you everyone. I think I'm leaning toward the 2 channel amp for the front L-R. Will HT suffer if the AVR powers the center and rears? Would a 3 channel amp solve this or would I again be sacrificing quality by moving to a multichannel amp? If I go the 2 ch route for now, do you have any suggestions for amps I should listen to? I see other posters recommending Simaudio and Plinius with the Forests but both seem rare on the used market and a bit pricey.

CK: your method sounds thorough and as far as buying used gear and re-selling, I do exactly that with photo gear but lenses are a lot easier to pack up and ship than 100 lb amps! I'm not sure I have that level of commitment (but that could change). I am in the NYC area and will look around for dealers who carry Totem to see what amps I can listen to. My strong preference is to buy used or demo gear.
Theclam, I hear you on the lenses (I am a Canon guy - love Fred Miranda site for swapping photo stuff). Amps aren't that bad to ship (like speakers for example). I think both SA and Plinius go well with Totem. But I would check some of the Totem threads for more ideas and what types of performance the different amps will produce.

Personally, I would keep the Onkyo and do as you suggest in the post above. I would even consider a BAT pre (with HT pass through) and a BAT SS amp. I think you may be able to get both together for well under your originally posted budget and suspect you will still be very happy with the results. FYI - I am down to just using a Yamaha AVR for my HT needs and to be honest am fine with it. I had in the past tens of thousands of dollars in HT amps, prepros and speakers. Yeah, its not that good by any means, but I am not that much into movies and I find my current system perfectly satisfying for me. Two channel is where my money goes now.