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Part of the answer is how "complicated" a setup are you willing to deal with - how many boxes, how it's cabled, how much "configuration" you have to switch to go from movies to music and vice versa.
The most straightforward setup that would still get you where you want to be would be to trade up the Krell to one of their newer ones that have the analog pass-through. Then you could buy a dedicated CDP and use it's analog outs. This is what I did in your same situation, actually with very similar or identical gear. I want the best sound I can get, but I don't want multiple equipment racks or something the rest of the family can't figure out how to watch a movie on.
To really streamline while still getting awesome sound, do the above upgrade and replace the Pioneer with a Muse Model 9 Signature DVD player. It is a phenomenal CD player, an exceptional DVD player (progressive scan output, plays CDRs and MP3s), and can be had very reasonably on the used market. This, again, was my approach and I'm very satisfied with the results. -Kirk
That is exactly what I had in mind but I thought the tube pre would bring something more to the mix. I'm considering trading up to the HTS3 7.1. It has the anolog pass through. Will that be all that is necessary for what I have in mind? Will the pre section of that unit be good enough? That is what I'm afraid of. If you have personal experience w/this let me know the details and how you like it compared to other systems you might have heared. Thanks for the responses. Keep them coming.....John