Mike, check your email - I have a unit that fits you to a T...
Avguy seems to contradict his own statement (no offense), but the AV receivers drop in value as quickly (reference the ability to buy the Denon 38XX-58XX receivers at 10-15 cents on the dollar) as the pre/pros, both suffering from the same cause. The problem is that when the AV receiver needs to be replaced, you are stuck replacing it with another receiver or a pre/pro plus new amplification.
Fact is that I have not really heard any AV Receivers that have anything above entry level amplification (I have listened to the Rotels, Denons, B&K, NAD and others). I owned a B&K 507 S2 AV Receiver and very quicly realized its amplification was its week link - ended up buying a bunch of amps and ran it as a pre/pro. After keeping it for about 6 months I realized this was foolish as the value of it was dropping like crazy and I would be better off selling it and just running with a good pre/pro.
The problem with the budget (and even the non-budget ones) AV receivers is that they are aweful to listen to in 2-channel mode. However, there is still a general weekness even with the good Pre/pro listening in 2-channel mode (which by the way is my priority). I spent the money on a brand new Krell HTS 7.1 latest version with all the current software thinking this should be it, it is a good pre/pro and has a good quality 2-channel based preamp built into it. Two months later I found myself out buying a new 2-channel only pre-amp (Aesthetix Calypso) with HT bypass. Now my pre/pro only gets turned on when I watch movies. Huge improvement.
In reply to the main question, your best bet is to buy a used good pre/pro and good amplification. Replace the pre/pro every 2 years (just staying behind the curve by 1 year) and keep the amplification for 5-10 years. This shouldn't cost more than a couple hundred bucks every 2-years or so. As for HDMI, run the HDMI signal straight to the monitor vs. through your pre/pro (so you don't need one with HDMI) and just bring in the audio signal to the pre/pro.
I guess I didn't word my initial question well.
I have a good multichannel amplifier, and an older preamp/processor (Sherbourn PT-7000). In the next couple of months I plan to get a flat-panel HDTV and at least a good upconverting DVD player. My current DVD player is an entry-level 2002 Toshiba.
Of course, the Sherbourn isn't up to the task of handling HDMI inputs from the cable box and DVD player, and will not be able to handle the newer HD formats, since those require inputs via HDMI. That's why I'm just wondering what to do from that point. The newer entry to mid-level receivers have a lot of the bells and whistles from a processor standpoint, and since I already have an external amp I can completely bypass the compromises in the receiver's power amp unit. Or I can get a dedicated preamp/processor (but the prices on those start a little higher).
So my question is not receiver vs preamp/processor + external amp, but rather receiver + external amp vs preamp/processor + external amp. Is there a significant difference in sound quality at that price point ($500-ish)?
I'll relay my experience regarding this. I have a Rotel 1066 pre/pro. My amps for my 5.1 system have varied,but the example I'll use involved a Krell KAV 3250. I used this amp to power my fronts and center. I have an Aragon 8008 powering my rears. My speakers are Martin Logan Ascents/Cinema/Depth(sub)and PSB Stratus Silvers for the rears. The Krell was exceptional in this setup-unlimited power-dynamic to a fault. One day I was bored an took the Krell 3250 upstairs and hooked it up to the pre outs of an expensive Marantz 5.1 reciever. I used quality Kimber interconnect for my connections. I played cd's/dvd's-listened to HD/sattelite and I couldn't even tell the Krell was powering the system. It didn't sound much different from the internal amps in the Marantz. It is my opinion you will improve your situation dramatically by adding a pre/pro. I can highly recommend the Rotel 1066. Used it goes for around 700 bucks-maybe cheaper. It has 7.1 capabilities and can accomodate 2 subs. It also has all of your analogue multi inputs for SACD and DVD Audio. I also think its fantastic as a 2 channel pre/amp.
Someone else had a similar concern recently, and this was how I answered it based on my personal experience. Whether to take this route (or not) depends on one's objectives. If you want good value and maximum flexibility, then the receiver might be the way to go; if ultimate sound quality is your goal that might lead to other alternatives.
... the knock on AVRs is the possible lack of transparency. While that may be concern, IMHO it is offset by the utter versatility to obtained from the AVR. I use a Denon AVR 3805 as the term implies ... as a 'preamp/processor' to the fullest. It performs great preamp duty as front end for 2-channel listening. In "Pure Direct" mode, all Digital Signal Processing (DSP), video circuits, etc are shut off. So the signal delivery is about as pure as one can get from an AVR. I run the Denon's front L/R pre-out through a Musical Fidelity Tube Buffer/Outboard power supply to Channel Island D-200 monoblocks ... musically very satisfying indeed.
Michael, Pre/Pro definately in regards to your reiterated statemen/question. If you think about the cost of a receiver (pre/pro + amplifier combined, which is what the AVR is) vs. a pre/pro for the same price, the pre/pro is putting all of the cost/money into one thing, not trying to do everything at the same budget.
Personally, I think there are great deals on used pre/pros. Secondly, I am totally confused by the HD Audio only being able to be conveyed by the HDMI cable as everything I have read about the HDMI cable clearly states it is not capable of carrying both an HD video signal and even a full resolution audio signal (much less an HD one?).
But, I am a strong believer that the video signal, via HDMI or any other method should not go through the pre/pro or AVR - what good can they be doing the signal? Most current TVs have 2 HDMI inputs anyway for two sources.
I would take the HDMI direct and the audio into the pre/pro via a digital cable. If you have a very, very high end DVD player with spectacular DACs, then it may be better using those DACs and onboard processing and taking the analog 5.1 or 7.1 signal to the AVR or Pre/pro.
If I were you, I wouldn't change what you have. I seriously question that spending $500 is going to give you any improvement in sound quality! I can also tell you from experience that the Totem Arro speakers on an AVR (from Denon 38XX and B&K 507 S2, of which I have owned both)versus a dedicate amp makes a huge difference.
Well I'm no rhodes scholar; (If my post was unclear.) BTW the best 3 years of my life was the time I spent in the second grade.
I own the Onkyo 875 and with the new audio codecs it sounds better than my previous 3k receiver; and this 875 was under a thou. I will lose 2k on the older model,at best. If I threw away the 875, I will only lose 1k.---THIS is what I was referring to.--- I, like many, use outboard amps and do 2ch on a much grander scale.
You are probably not going to find a pre/pro that does the new audio formats for $500, new or used. You might find a receiver used such as an Onkyo or Denon for that price but even those are not that readily available because they just have not been out that long.
The biggest advantage would be that a pre/pro will cost less than a receiver of the same quality. Unfortunately starting price is about $1600 for a pre/pro such as an Integra dct 9.8.