Originally Posted by MPliskinS
The main reasons I want a receiver are: more connectivity options, better upgrade-ability and hopefully in the long run better sound.
Contemporary receivers are pretty much all the same with variations for build quality. I can only post regarding USD and availability in the US. As to receiver choice, it all boils down to budget and what features are you willing to compromise on. My perspective is that of a Denon/Marantz fan. Our current receiver is a Marantz SR5007. After having it for a couple of months, I have no buyers remorse and see nothing that turns my head; it's my personal ideal in receivers. In response to your above, you comment about upgrade-ability. Sans pre-outs, beyond upgrading firmware, there's nothing to upgrade beyond replacing the unit itself. As to sound quality, you'll find that lays with your speaker budget and choice as today's amplifiers are engineered towards a flat, neutral response with you the user EQ'g the sound graph to your liking.
I am an avid gamer so this receiver would be used primarily for playing games, though I also watch a blu-ray or dvd every so often.
It will be hooked up to a Wii and a PS3; now I am not sure if every receiver supports it, but I would like for it to support Dolby Pro Logic 2 since the Wii has no real discrete audio support and for my PS3 at least DD/DTS and LPCM. In the future it will probably be connected to a Wii U as well (also a motivation to get a receiver since it will only support LPCM audio through HDMI).
A requirement that most if not all of today's units should be able to handle.
My plan is to re-use my 5 satellite speakers from my Logitech Z-5500 for now as to spread out my purchases a bit more, but the plan is to eventually also get 5 new speakers essentially replacing my whole 5.1 setup.
I will need a new subwoofer since the one that comes with the Z-5500 is proprietary and doesn't sound that great anyway (really boomy and the bass is not very tight).
Any suggestions on recommended speaker bundles and subwoofers are appreciated.
My recommendation would be to concentrate on the receiver first as speakers are a whole separate conversation. With your stated budget, you might find it best to buy the receiver and then slowly step up to your speaker choice. If I were to give advice regarding subwoofers, my recommendation would be to consider a pair of 10" subs for smooth, tight bass.
To start the conversation, my AVR recommendation would be to look at the likes of a Denon AVR1712 (last year's model) or this year's model, a Denon AVR1713. FWIW, as I'm sure you know, technology moves fast as that's what keeps consumers buying. One needs to expect to have to periodically upgrade to the latest and greatest or be left behind. It's an electronic conspiracy, I know, but that's the way it is for us consumers. As to other manufactures and models, I'll let others chime in with their recommendations.
As to speaker choices to look at, a good starting point would be Polk Audio and Pioneer.