Great, thanks. So two Monitor 40 Series II, a CS1 center and your suggested Dayton 1200 sub comes out to $400. I could then expand with two Monitor 30s for the back speakers.
Does the receiver downscale a 5.1 signal to 3.1? I use my PS3 (Netflix, Blu Rays, Amazon Video, pirated PC streams) as my primary AV source. If I push Dolby 5.1 or LPCM 5.1 out to the Yamaha V377 will it decode and play with the 3.1 setup? Again, please excuse me if my questions are stupid. And thanks a lot for all your help.