Suggestions on replacement AV processor...

I am looking for suggestions on an AV processor. I have been looking at the Krell HTS, Krell AV Standard, Lexicon MC1, Proceed PAV/PDSD, CAL, B&K, Meridian... Just too many.

I really want great 2 channel for music, and great surround sound. Is this possible? Should I separate the 2 channel from the surround system?

My current setup is Cary 300SE Amp, Cary 303 CD player, JM Labs Utopia speakers, Transparent Audio super cables. Yes, no preamp, it blew up! Thats why I am in the market for another.

I have a budget of aprox. $4000.
The answer you will get from most audio/HT buffs is to have separate systems, provided you have the space and budget for both. Some of us like me, however, do not have room in our homes for both. My own priority in building a system was to have really good 2-channel audio, but also enjoy a high quality HT system. (You can look at my system in "Virtual Systems", where is listed under my member name Sdcampbell with the title "High resolution audio/HT system".) After a lot of looking, listening, and thinking about buying the best pre/pro I could afford, I bought the Bryston SP-1 (Bryston also makes Lexicon), which provides a high-quality analog bypass circuit, plus excellent surround processing. I continue to be impressed and pleased with the high quality audio that Bryston has delivered in the SP-1 -- not to mention their 20-year transferrable warranty. I can't say the SP-1 is the best choice for everyone, but if your priorities are on audio quality rather than lots of features, and you are limited to a combined rather than separate audio and HT setup, then the SP-1 ought to be on your short list.
I am primarily a ultra high end two channel guy and my experiences with high end processors has been disappointing. The difference between a Sony SDP-EP9ES and a ultra high end Fosgate or Lexicon is (in my opinion) not worth the expense.

For that reason, I would find a Sony SDP-EP9ES used and spend the remainder of your budget on a great used tube (two channel) preamp. You may be able to swing an Aesthetix Callisto which is my reference.

The Sony is discontinued, several sites pop up at Google with images and specs if you wish to research. These closed out at about $450.00 new in box three months ago, from an original price of about $1200.00 retail.

I think your system will reproduce much better sound everywhere with your budget split the way I suggest. The two channel will leap light years ahead and the surround will be equal or better than if the $4000.00 was dropped on a processor only.
With 4K you could almost afford a used Theta Casa Blanca I with superior dacs in the front. That would do the trick!!!
Separate the systems if possible. Spending money on an expensive highend processor is (sorry everyone)a waste of money. For HT, an inexpensive processor like the Sony Albert describes will suffice just as well as a 10K processor. To get the best sound for HT and stereo in one room with one processor will yield trade offs. Sound for 2ch music and movie soundtracks are dispearst differently. So right from the start there has to be a trade off (compramises). What is the sense spending the money on an expensive highend processor if music is of the highest priority. If willing to live with the tradeoffs than realise your not going to be getting the best of either surround sound or HT. For the best sound for music, one must build a seperate room matched and tuned for sound with the appropriate components made to deliver the proper dispersion of sound waves. Same applies for movie soundtracks. Just that they are different from one another. For example, one may need to reflect sound while the other will need to absorb sound for the best result and best sound. How can this end up giving the best sound from both. What happens is that one must come to a compramise. Why spend 10k on an expensive processor to only come to a compramise. Wasted many thousands to realise this. Me, i would buy a receiver for HT and in a seperate room spend the money on the best musical system i could afford. Sorry for bad spelling. No spell checker today!!!!!!!
Sorry, I'd have to strongly disagree with the last post "Spending money on an expensive highend processor is (sorry everyone)a waste of money". A decent HT processor is NOT a waste of money at all. You have to consider that most cable, offair and DBS sources are not Dolby 5.1 or DTS. A cheaper processor would be ok if it all was, but this is simply not the case, so further processing is required such as Lexicon's Logic-7, Fosgate/Citation 6-axis, Meridian's Prologic II, etc. These processing modes work wonders on non 5.1 or DTS programs. If you HT is just for listening to DVD's, I guess you could go with a cheaper processor, but if you wish to hear decent sound from other sources, a higher end processor is a MUST HAVE! I seldom, if ever, take my Lexicon out of Logic-7 mode, even with 5.1 and DTS encoded programming, as it sounds great without the horrible DSP modes that a Sony processor uses.

My thoughts anyway..
Speaking as someone who has had both setups (2 seperate system and now 1 system) I say you need to weigh your priorities. I 2ch music is what you really love, then you need two systems. You will be happy with nothing less. I do agree that the Bryston is a good compromise, but there better 2ch preamps out there. Not to mention that in a HT setup you have a projection tv and 4 or 5 other speakers radiating when you listen to 2ch. Myself, I had to consolodate (the upgrades for both systems were just getting too expensive). If you have the cash, two systems is really the way to go. From the brands you listed I like Proceed (mine), Meridian (if only I had the cash for their complete digital system), Bryston (excellent warranty), and B&K (excellent choice if you have 2 separate systems). Good luck.
Since you seem to be a Cary kind of guy, how about the new
P-7 Surround Sound Processor/Preamplifier 7.1 Specifications
The P-7 design is a fully 24 bit/96 kHz circuit with the Motorola 5636 DSP chip. It uses discrete analog to digital and digital to analog converters (ADC/DAC).
Decoding ability:
Dolby Surround, Dolby Pro Logic, Dolby Digital, DTS
8 for audio or video/assignable
Surround Sound Modes:
7.1, 6.1, 5.1 for Dolby Digital/DTS (if applicable)
Outputs for speakers:
3F, 2S, 2R, SW
Mono/Stereo switching, multiple music modes for stereo surround simulation.
RS-232 port on back panel for future upgrades.
Balanced Outputs for main stereo speakers.
Bass and Treble controls, with bass management circuit.
Video Signal Resolution:
540 TV Lines
Signal Format System:
PAL (625/50, 525/60)/
NTSC (525/60, 625/50)
S-Video Output:
Luminance Signal: 1Vp-p (75 ohm load)
Color Signal: 0286Vp-p (75 ohm load)
Component Video Output:
Y Output Level: 1V p-p (75 ohm load)
Cb Output Level: 0.7V p-p (75 ohm load)
Cr Output Level: 0.7V p-p (75 ohm load)
Frequency Range: 2 Hz - 44 kHz
Amplitude Linearity: +/- 0.2 dB (20 Hz - 20 kHz)
Phase Linearity: 3 degrees (20Hz - 20 kHz)
Dynamic Range: 110dB (1 kHz)
Signal-to-Noise Ratio: 110dB (1 kHz)
Channel Separation: >100 (1 kHz)
Total Harmonic Distortion: 0.0008% (1 kHz)
Audio Output Level: 1.0 Vrms
Power Input: 120/240 VAC, 50-60 Hz
Power Consumption: 25 Watts
Retail Price: $3,500
Balanced analog audio outputs: $500
I personally don't think a "Cary" kind of guy would be happy with "bugdet" processor.People whom only have such, are missing a lot.Dvds aren't only about sound effects from 9 different directions. There in much good music in most movies. Somewhere down the road a quality pre, and, a quality processor will be required for optimum enjoyment. You have to make your decision; which is the more important to you? As I see it you need a 2/3k pre and a 4k processor.--2 choices. A processor such as MC1,and hold off for the great 2ch pre --Or, something like the Cit. 7.0 (4/5 hundred used) and that great 2ch pre. The MC1 will devaluate faster than the 7.0( The 7.0 as a temp. band-aid) It was a 3500 piece new;just no DD/DTS. You won't be giving up all that much/ you just hook the "fronts-out"(analog output) into an unused input on your good 2ch pre,--for movies.--(for your 2ch,switch back)
Get a good A/V preamp and a separate audio preamp. I have the Lexicon MC-1 and love it but it really needs a good preamp after it to make 2-channel shine. Check out a used BAT VK-5i or the like. These two in combination are very nice.
I recently purchased a Krell HTS. The Krell is fantastic for movies but not very good with 2 channel. This isn't an issue for me as I run the digital output of the Krell to my external DAC.

In terms of having to have seperate HT and audio systems, I strongly disagree. The problem I always had with the two was sticking a TV between my two speakers. I avoided this problem by purchasing a DLP projector with a retractable screen. My audio is set up optimally for music and the HT is an "add-on" that doesn't get in the way. I am blown away by what a great video system can do when matched to the same caliber as a high-end audio system.
It is possible but it will cost much more thn 4000 dollars. Your equipment is not cheap, so even after you do choose a preamp/processor your just gettting started. By the way I chose the Theta Casa as well. Digital technology is changing at a remarkable pace but a smooth tube sound will always be a constant in your system just based on your Cary components. Do your homework on each of the companies and read everything you can especially there philosophy on the incorporation of new digital technology into there existing models. I already agree with your system design; tubes in the front and tubes at the end of the audio chain. While not cheap definitely sweet.
Thank you all for your sugestions. I am going to persue a dual system.
Many/most prepro's these days will have an analog pass-through for your 2-ch pre and whatever source components are hooked to it. So you don't necessarily have to physically separate your systems, except ...

The worst part of an integrated system is the front speaker placement. It can be tough to get enough physical separation from boundaries, be they the front wall, equipment racks, or a hulking RPTV monolith. I've flipped-flopped from separate to integrated and back 2 or 3 times over last few years. With the maturation of multi-channel SACD/DVD-A, I can see going back to integrated, but only when I also switch to a front projector to get the front stage set up well. What's your display situation?