Gain more from speakers or receiver?

$1,000 of speakers will sound infinitely better with a $200 receiver than $200 of speakers with $1,000 receiver. Dollar for Dollar, it is no contest.

Invest in good quality speakers first. You won't regret it.

Bang for buck = New speakers.

The best speakers in the world will sound like crap if you aren't providing them with a quality source. Buy a good receiver that will produce a clean source going to your speakers.

For $2000 you can get a decent upgrade in speakers and a quality AVR - especially if your sub is good (which PSB sub do you have?).

In June the new Pioneer receivers come out - you should be able to get a VSX92 for a great price then. There are many other quality AVRs you can get on sale for $800ish too.

That should leave you plenty of money to buy a 5.0 speaker setup that will make you very happy.

FYI, it's lame to post the same question in two different forums.

http://www.avsforum.com/avs-vb/showthread.php?t=1028507

I agree with this statement, however!!

In your case if you don't care about the newer codecs, HDMI capability or any other new feature of the latest receivers, what you have is decent and you may benefit more from the speaker upgrade.

If Blue-ray is a possibility in the near future to take advantage of the newer codecs upgrade the receiver.

My opinion, bang for buck is generally obtained by balancing the system expenditure among the following, in order of priority.

1. Speakers
2. Room Acoustics
2. Source
2. Preamp
2. Amp

50% should go to speakers, the remaining 50% should be divided equally among the other four. Preamp+Amp = receiver.

So if you have $2000, spend $1000 on speakers, $500 on receiver and the remaining on the other categories. Of course if you already have other components the division might be a bit different. Depending on the room, acoustics can probably be left out until the system cost goes above $3000. After that level you are wasting your money if you don't consider room acoustics.

So if you are planning on a $2000 upgrade, and are happy with your source and the room acoustics aren't terrible, buying a $650 receiver now, and $1350 speakers later is a reasonable approach.

Maybe.

We have to define quality though. Something that puts out 10 watts with 10% THD is not going to work. But anecdotal evidence suggests most home theater receivers work very well within their power limitations.

Any decent receiver will benefit from great speakers. You simply need to ensure it puts out sufficient (undistorted) power for your needs. By decent, I mean brands like Onkyo, Denon, Yamaha, Sony*, Pioneer, JVC etc.

All these companies make decent receivers at all their price points. They may have limited power and/or features depending on model, but they will all put out clean power. Obviously the cheapest models will have limited power.

I would avoid underpowered HITBs and boomboxes. I would avoid unknown brands of equipment if you know nothing about them.

* Sony makes perfectly fine receivers. Their cheapest models are reputed to be underpowered though; I don't know that from experience, I state that based on user feedback.

I agree with ehlarson's recommendation! The "2/3" rule for speakers and "1/3" for amplification/pre-amplification works quite well for "modest" budgets! As you get into much larger budgets, you can then probably go to whatever allocation is necessary to produce the best synergy. The $1,350 and $650 for speakers and AVR, respectively, will give you the most ideal results within your budget. Good luck!

Think about it this way: which will give you +/- 1.5db 20-20kHz at less than .1% THD. A speaker with less than 1% THD is considered pretty good. A speaker that can play +/- 3db, full frequency is rare. A receiver that can put out the power needed to do that job at 93db at listening position (87db/watt, speakers 4 meters away, point source= ~64 watts for 105db at 1m), with less than .05% distortion, and and less than 1db off from flat frequency response, full-range, can be had for less than $1000.

A speaker that can do that... maybe something like this, at 250,000 Euros
http://www.adam-audio.com/hifi/english/oss/pop_oss.htm