Parasound 7100 Pre Pro and 5125 Amp

You'll compromise dynamics processing the HD sound from the dvd player, IME. yes, Ideally you should use an outboard decoder for the latest digital hd sources. for other PCM, SACD and DVDA from better players, you can process that sound from the analog outs, however. There you will be fine, in my experience. But, you can experiment.
Otherwise, you should do fine with your speakers. I would still cross em over at 80hz to a sub for movies though. Better dynamics and power handling for sure. But, if you do full range across the board (movies and music), just go easy on the volume, and expect dynamic compromises overall
I would strongly recommend a pre/pro with DSP room correction these days - as the sonic benefits are huge in typical domestic rooms! Otherwise, look for a Rives Parc (my experience, anyway).
Otherwise the Parasound is sonically good stuff - but lacks sophisticated EQ to smooth the sound, and knock down the peaks in your system - so consider.
tell us about your room and the rest of the system? thanks

I will be buying everything, my main audio system has been moved to another room ( the main system is composed of Marsh Pre and Power amps, Dahlquist mirrored DQ-10s, with electronic cross over and subwoofer, as well as an NHT subwoofer. I also have a pair of Maggie 1.6s that I switch in and out. I have a Rega P3 turntable, a Rotel CD player and a Slim Devices Squeezebox, that serves as my connector to the music on my iMac)

The new system will be in a living room that is shoe box shaped, with the Monitor and sound system on one long wall and the seating on the other long wall. The room is 22'X14'X8'. The Monitor will be either a 50"ish Sony KDL 4 or a Pioneer Kuro. The DVD will be an Oppo for the short term until Blu-Ray prices and content start to improve, there will also be HD TV from either Dish, which is what I have currently or Cable. The room is bright as there is a 12' window, with plantation shutters, right behind the seating area.

If I don't get the Parasounds, I am looking at NAD (T175 and T975, sister company to PSB) or the Integra which everybody loves but nobody comments on what amps to use. I agree that room correction would be very cool. Any suggestions as to what I should consider would be appreciated.

I also have gotten conflicting info about whether to run HDMI into the pre-pro as opposed to directly to the Monitor with Digital Coax to the pre-pro for sound.

As for audio quality, which is the most important use for this system, I will most likely be streaming uncompressed AIFF files from my Home Media system, so the quality of the DVD audio abilities is not that crucial. The sound quality of DVD's and TV will be important.

As a dealer for Parasound, NAD, and PSB Synchrony I will chime in.

First, the Parasound is capable of HDMI switching via the optional Zhd Switcher. Go the website and see if it's right for you. With the Parasound sale going on, it would be almost impossible to pass it up. Plus, their amps are rock solid and sound wonderful with PSB.

The NAD combo is also very nice. If you can get into the NAD Master series even better. That is what we use with PSB One towers.

The majority of the time, we still run HDMI from source directly to the monitor and use the digital audio outputs from the source to the pre-pro. Will continue to do so until the compatibility standards and issues are resolved.

Great choice in speakers!!! The One Towers are phenominal.

Thank you for your comments, I appreciate the candor. I agree with the comments about the speakers, I have compared them to B&W and Thiel and think they blow them away. I have not been able to hear the Parasounds, even though Parasound itself is in SF, just up the peninsula from me. When I heard the PSBs, they were driven by the NAD Master Series and it sounded great, I am curious by what difference I would hear by dropping to the T175 and 975?