I think this interview with Jeff Talmadge from Denon will help clarify the differences between the 5308 and the AVP:http://www.listenup.com/content/part...dge.feb.08.php
As to my two cents concerning whether you should purchase the AVP or 5308 (I have an AVP on order by the way), you really need to answer one question:
Do you want the unit serving as a prepro (either 5308 or AVP) to deliver state of the art, top quality sound for music? If the answer is yes, I'd recommend the AVP over the 5308 because it was designed in large part for this purpose. Conversely, if your system will primarily be used for HT and only music on occasion for casual listening, I'd go with the 5308.
I'll offer my opinion of the technical advantages of the AVP over the 5308 from a music reproduction perspective based on Jeff's interview plus feedback from several AVP owners on their thread http://www.avsforum.com/avs-vb/showt...php?t=1006957:
1: Because the 5308 and AVP weigh about the same without the AVP having a power amp section, that means most of that weight in the AVP (~60 lbs) belongs to its power supplies. That kind of weight for a prepro is close to, if not unprecedented and suggests a no holds barred effort to achieve world class sound quality. Any preamp or amp designer will tell you that superb power supplies are a key ingridient of superb sound quality. The weight of the AVP's power supplies suggest that they are very large, stable, and highly regulated (again, good design omens for sound quality)
2: Jeff mentions that the AVP's DACs and even volume control are fully balanaced (dual-differential). This is rare in preamps at any price, generally costs more than single ended designs to implement, and is specifically designed to reduce noise in circuits. This design feature is another indicator that Denon's goal for the AVP is top notch sound quality.
3: I've spent a lot of time on the AVP owner's forum and most owners have found its sound quality for music comparable to prepros from Halco, Meridian, and Theta Digital (I owned Theta's Casablanca prepro for several years myself). That says a lot about the sound quality of the AVP. Moreover, a few users found the AVP's sound quality sufficiently good that they sold their high-end, two channel preamps.
Despite all of the verbiage I've expended on the AVP, I want to reiterate that it won't necessarily provide the best value for you. As I stated previously, this depends how much you value top-flight music reproduction vs. HT use. Note that as you might expect, pretty much all AVP owners have also found it to be superb for HT use as well. In my experience, I've never encountered a prepro that performed well for music that did not do the same for HT, though the inverse was not always true.
I hope this helps.