First: If you start reading and realize there are quick answers in other threads, please point me there. I'm poking around the entire forum, and I'm sure I'm missing plenty.
People seem to be pretty high on the Onkyo 807. I have about $1500 to upgrade my receiver, two front speakers, and my center speaker. MSRP for the 807 is around $1100, so I'm wary about giving > two-thirds of my budget over to the receiver. Am I leaving enough for the speakers, or should I downgrade to a lower receiver (Onkyo or Denon from the threads I've seen)? Should I give myself more headroom and also throw in a new sub? The room is not big, and the cheap sub I have now seems to provide plenty of bass.
Shift existing, cheap fronts to rears, converting 5.1 to 7.1.
Have a receiver that can process all commonly-used audio formats.
Have a receiver that accepts (and up-res-es when necessary) various inputs via HDMI and component.
Speakers and sub: standard Polk Audio RM6750 set that many use for their starter set
Receiver: Onkyo 304
TV: Sony KDF-46E2000 (720p RP LCD)
DVD / BluRay through PS3 HDMI
DVD / HD-DVD through Xbox360 HDMI
Also will be connecting Wii and PS2 via component.
May throw in an HDMI HTPC in a year or so.
Room: Basement. Couch is about nine feet from TV, TV is on center of wall, and room is about 18x18.