I have a Denon DVD 955 hooked into my Rotel RSX 1057 via SPDIF. I was using my sound meter to set up the speaker levels. My reciever generates its own test tones and I set it up that way. Then I used the Avia test tones and got some pretty different readings. Why would this be and which are better to use?

The readings from your reciever, while fine, are not gonna match the levels you get from a DVD such as avia because they include your source 'the DVD player'. I would use the levels on AVIA to calibrate the levels as the levels in much of the AV equipment is an afterthought and may not be a calibrated source to begin with.

also if I remember correctly the avia tones are set at85db while your receiver is probable 75-

The AVIA tones are of a narrower bandwidth than most receiver tones. It makes it easier for the SPL to read, but one wonders if the wider bandwidth tones are not more representative of the room..

I generally feel the Avia tones are more correct or sound better.